On Feb. 2, the White House released President Obama’s Fiscal Year 2016 Budget which he described as being based on middle-class economics, to which many congressional leaders have expressed varying opinions.
According to the White House, the Budget offers a “deficit reduction” to the tune of $1.8 trillion primarily through health program reforms, the tax code changes, and immigration.
According to House Budget Committee Chairman Tom Price, M.D. (R-GA-06) and Senate Budget Committee Chairman Mike Enzi (R-WY), the proposal includes a $2.4 trillion increase in spending, a $2.1 trillion tax increase and a $8.5 trillion increase to the national debt.
Representative Chris Van Hollen (D-MD-8), Ranking Member of the House Budget Committee described the budget debate as, “not just about a set of numbers” explaining that it represents collective values and priorities.
In addition to other tax increases as put forth by the Obama administration, the proposed tax increases include levies on savings and investments, small business, and increased hiring costs. Despite increases, the budget does not necessarily balance in terms of spending versus revenue.
Included in the Budget is $74 billion in increases to annually appropriated spending, for a total of $259 billion or 7 percent. Assuming the plan was put to use over the next 10 years, spending would increase 65 percent over today’s levels for a total of $2.4 trillion.
Additionally, the plan raises interest which would translate into nearly tripling costs over the next 10 years; since 2009, $21.1 trillion has been spent and the national debt has increased by $7.5 trillion with the proposed budget adding an additional $8.5 trillion. Deficits are estimated at $5.7 trillion with a gross debt totaled at $26.3 trillion in 10 years.
Assuming these costs remained in place once a new president takes office through the end of the plan, the interest costs would be larger than proposed spending for national defense, or Medicaid or the combined total of all spending for non-defense agencies.
In their joint statement, Price and Enzi call the current economic path unsustainable placing blame for failed policies on debt and an underperforming economy.
“The president is advocating more spending, more taxes and more debt. As we have seen over the past several years, that approach will yield less opportunity for the middle class and a crushing burden of debt that threatens both our future prosperity and our national security.”
Price and Enzi called the President’s budget, which is required by law to be submitted, a “wish list” stating that within the next ten years, their goal is a complete, on-time and balanced budget; notably, Congress holds budgetary power.
Annually, a budget proposal is required by law to be submitted by the President, but ultimately, Congress holds budgetary power. The Price and Enzi joint statement noted that they will work with their colleagues to make sure it is complete, on-time, and balanced within the next ten years.
Pushing back, Van Hollen argued that Obama’s budget favors working families over special interests and the wealthiest of Americans.
“This budget moves us in the right direction. Unfortunately, our Republican colleagues have only offered an agenda that protects the top 1 percent at the expense of everyone else,” said Van Hollen.
The President’s budget includes a variety of education reforms including access to child care, increased tax credits for childcare expenses, more Head Start and childcare programs, support for universal preschool, increased funding for special education and English language learners, as well as $3 billion for science, technology, engineering and math (STEM) programs.
There are also a variety of other measures included relating to higher education, like student loan management programs, free tuition for two years to community colleges, increases to Pell Grant funding tied to inflation rates, and streamlining the Free Application for Student Aid (FAFSA) that students are required to fill out when applying for federal grants and loans.
Additionally, the President’s budget allocates billions to cyber-security measures, prescription and drug abuse reforms, disease eradication measures, as well as measures to help veterans.
U.S. Representative Jeff Denham (R-Turlock) posted a statement on Facebook regarding President Obama’s budget proposal.
“Although I applaud the inclusion of French Camp [Community Based Outpatient Clinic] in President Obama’s budget proposal, it fails to provide a plan that truly tackles our debt or deficits. Today, partly as a result of the trillions in new debt accrued since President Obama took office, we’re spending almost as much in interest on our national debt ($227 billion this year) as we are on funding the VA and our education systems combined. Under the budget he released yesterday, interest on our debt will cost us more than triple that amount by 2025. More spending isn’t the responsible solution hardworking Americans are looking for, and raising taxes on one group instead of finding a larger tax reform solution that makes our tax code flatter, fairer and easier to understand is short-term thinking. Moreover, we have a responsibility to balance our budget just like families all across the country do every day. The President’s budget, which never balances, isn’t a viable option.”