On Monday, President Obama presented his new budget proposal, suggesting that the government spend $3.99 trillion for the 2016 fiscal year that starts October 1st, 2015. This is a 6.4% budget increase from the current year, but White House officials estimate a $474 billion deficit, the lowest since 2008, and $3.53 trillion in revenue. Obama’s proposal calls for more programs for the middle class with higher taxes on corporations and wealthier citizens, but it has been criticized for not addressing the largest contributor to the federal deficit: entitlement spending (Social Security, Medicare and Medicaid, unemployment compensation, etc). He does, however, recommend a 4.5% increase in military spending, up to $612 billion, though the GOP already anticipates rejecting the billions of dollars he wants to spend combating climate change and promoting renewable energy technologies.
House Speaker John Boehner (R., Ohio) says the budget “contains no solutions to address the drivers of our debt, and no plan to fix our entire tax code to help foster growth and create jobs,” but there do seem to be some opportunities for compromise between Democrats and Republicans. While Republicans end to be more reluctant to break the 2011 debt deal spending caps and would prefer to move money from elsewhere, both parties are in favor of the increased military spending. This includes boosting the Defense Department’s base budget as well as that of the Department of Veterans Affairs. Also, though they disagree on the exact tax rate and whether it should be mandatory or voluntary, both parties would like to build up America’s infrastructure by taxing corporations for overseas earnings. Lastly, the proposal also includes the tripling of the maximum child care credit to $3000 for middle class families. While this is just a proposal, we can keep our eye out in the future to see what parts will pass, what changes will be made, and what the final budget is.
Contrubutor: Raina Searles