Obama proposes $3.99 trillion budget, sets up battle with Republicans

[LostInAK 43]

(Reuters) - President Barack Obama on Monday proposed a $3.99 trillion budget for fiscal year 2016 that sets up a battle with Republicans over programs to boost the middle class that are funded by higher taxes on corporations and wealthy Americans.

The budget foresees a $474 billion deficit, which is 2.5 percent of U.S. gross domestic product. It projects deficits stabilizing at that rate over a 10-year period, senior administration officials said.

Obama's budget fleshes out proposals from his State of the Union address last month and helps highlight Democratic priorities for the last two years of his presidency and the beginning of the 2016 presidential campaign.

But it is as much a political document as a fiscal road map and would require approval from the Republican-controlled Congress to go into effect.

"There are going to be areas where we get big disagreements, but what I want us to focus on is the areas ... we have in common," Obama said on NBC's "Today" show.

"And we'll have some battles along the way, but there's going to be a whole bunch of stuff that we can do that's really productive."

The president is scheduled to speak about the budget at 11:55 a.m. EST (1655 GMT) from the Department of Homeland Security, a site the White House chose to emphasize its insistence that Republicans fund the agency charged with implementing his controversial executive actions on immigration.

Republicans have said they see room for compromise in areas such as tax reform and infrastructure, but many of Obama's programs, which were rolled out in the weeks before the budget's release, have landed with a thud.

"When ... he devotes his time and energy to talking about the new tax-and-spend policies that progressives like and Republicans universally oppose, he signals to Congress that he is once again looking to argue rather than to legislate," said Keith Hennessey, a former economic adviser to Republican President George W. Bush.

Democrats, however, viewed the budget as a statement of their priorities and a chance to demonstrate that they represent the party that champions middle-income Americans.

"(It) affords him an opportunity to contrast his vision of helping the middle class with the Republican Congress' approach of exacerbating inequality, ignoring the middle class and making the burdens of those who want to enter it even greater," said Neera Tanden, president of the Center for American Progress, which has close ties to the White House.

INFRASTRUCTURE, TAX REFORM

The budget achieves some $1.8 trillion in deficit reduction over the next 10 years, officials said, through healthcare, tax and immigration reform, but the forecast assumes Republican support for Obama's programs, which is unlikely.

Republicans have blocked immigration reform legislation in the House of Representatives, for example, and Obama's budget assumes passage of such a bill.

The administration foresees a continuation of the decline in unemployment, forecasting a rate of 5.4 percent in 2015. The rate currently stands at 5.6 percent.

It also proposes a new infrastructure bank, a 6 percent increase in research and development, and a controversial consolidation of U.S. government agencies. Obama has previously proposed combining trade agencies, but the proposal fizzled.

The budget sets aside $14 billion to strengthen U.S. cybersecurity defenses after a spate of high-profile hackings.

It calls for a one-time, 14 percent tax on an estimated $2.1 trillion in profits piled up abroad by companies such as General Electric (GE.N) and Microsoft (MSFT.O), while imposing a 19 percent tax on U.S. companies' future foreign earnings.

It proposes a 7 percent rise in U.S. domestic and military spending, ending "sequester" caps with reforms to crop insurance programs and closing tax loopholes such as one on "carried interest." Those moves would help fund investments in infrastructure and education.

The budget would also reform rules governing trust funds and raise the capital gains and dividend rates to 28 percent from the current top rates of 23.8 percent.

In foreign policy, the budget funds efforts to defeat Islamic State militants and support NATO and European allies against Russian aggression, the White House said.

Source: http://www.reuters.com/article/2015/02/02/us-usa-budget-idUSKBN0L60XN20150202

$474B deficit? For someone that went to Harvard, you'd think he would understand the simple conecpt that it's not a good idea to spend more than you bring in. Guess not.

Edited February 2, 2015 by LostInAK

[JohnR! 5,495]

He has that in common with most of his predecessor too...

In taking this approach he is, no doubt, pandering to the GOP side of the aisle, for whom “(Ronald) Reagan proved that deficits don't matter.”

This is how we roll in Murkha. Get used to it.

$474B deficit? For someone that went to Harvard, you'd think he would understand the simple conecpt that it's not a good idea to spend more than you bring in. Guess not.

[I AM NOT THAT GUY 5,715]

$474B deficit? For someone that went to Harvard, you'd think he would understand the simple conecpt that it's not a good idea to spend more than you bring in. Guess not.

Funny thing about so-called "deficit" numbers? They rarely reflect reality.

Obama’s 10 Year Budget Will Add $6 Trillion to the National Debt

[LostInAK 43]

He has that in common with most of his predecessor too...

In taking this approach he is, no doubt, pandering to the GOP side of the aisle, for whom “(Ronald) Reagan proved that deficits don't matter.”

This is how we roll in Murkha. Get used to it.

In case you haven't noticed, Obama is the current president. I suppose since Nixon lied about wiretaps and Clinton got a blowj0b in the white house while he was married then by your logic it would be perfectly fine for Obama to do the same since previous presidents did it? Right?

Edited February 2, 2015 by LostInAK

[Mr. Big Dog 10,747]

Funny thing about so-called "deficit" numbers? They rarely reflect reality.

Obama’s 10 Year Budget Will Add $6 Trillion to the National Debt

Yeah, well, the reality is that deficit and debt are two different things.

[I AM NOT THAT GUY 5,715]

Yeah, well, the reality is that deficit and debt are two different things.

One is a function of the other, or haven't you noticed?

[JohnR! 5,495]

Yes, Obama is the current president, and I'm sure that in taking this approach he is, no doubt, pandering to the GOP side of the aisle, for whom “(Ronald) Reagan proved that deficits don't matter.”

In case you haven't noticed, Obama is the current president.

Good luck using logic and cogent discourse...

Yeah, well, the reality is that deficit and debt are two different things.

[Mr. Big Dog 10,747]

One is a function of the other, or haven't you noticed?

Yes, I have. Thanks for asking. But they're still not the same. As such, the deficit number does reflect the reality that the proposed budget has a $474 billion deficit for FY 2016. The other reality is that the proposed deficit for 2016 and forward would be about at the historical average of about 2.5% of GDP - a level most economists would consider sustainable.

[luckytxn 2,265]

It is just money. They will print as much as needed. What's the problem?

[I AM NOT THAT GUY 5,715]

The other reality is that the proposed deficit for 2016 and forward would be about at the historical average of about 2.5% of GDP - a level most economists would consider sustainable.

That only works in the unlikely case that interest rates will remain at historical lows. For a president who requires the debt ceiling to increase a trillion or more each year, his budget predictions are suspect. No matter. Every President's budget proposal is dead upon arrival, and therefore, a waste of trees. I wonder why, now the we are decades into the electronic age, why they still print these things? The IRS doesn't even mail out much more than payment vouchers and estimated tax coupons any more.

[Mr. Big Dog 10,747]

That only works in the unlikely case that interest rates will remain at historical lows. For a president who requires the debt ceiling to increase a trillion or more each year, his budget predictions are suspect. No matter. Every President's budget proposal is dead upon arrival, and therefore, a waste of trees. I wonder why, now the we are decades into the electronic age, why they still print these things? The IRS doesn't even mail out much more than payment vouchers and estimated tax coupons any more.

More than a trillion each year? There wasn't a trillion dollar deficit since FY 2013. Why would the debt ceiling need to be raised significantly more than what the deficit adds to the debt? Since you want to talk about reality and all.

Edited February 2, 2015 by Mr. Big Dog

[I AM NOT THAT GUY 5,715]

More than a trillion each year? There wasn't a trillion dollar deficit since FY 2013. Since you want to talk about reality and all.

Republicans kinda put a wrench in the works for Obama's ideas, by agreeing to his sequester proposal, didn't they?

Edited February 2, 2015 by I AM NOT THAT GUY

[Mr. Big Dog 10,747]

Republicans kinda put a wrench in the works for Obama's ideas, by agreeing to his sequester proposal, didn't they?

That's not really the point. You claimed that the debt ceiling needed to be raised more than a trillion each year. That's not exactly true.

[I AM NOT THAT GUY 5,715]

Why would the debt ceiling need to be raised significantly more than what the deficit adds to the debt? Since you want to talk about reality and all.

I guess we will find out, sometime between now and March 15th.

The Treasury Department now has free rein to finance the federal government through borrowing, with the ceiling that limits the total debt suspended until March 15.

http://thehill.com/policy/finance/230616-when-will-the-debt-ax-fall

That's not really the point. You claimed that the debt ceiling needed to be raised more than a trillion each year. That's not exactly true.

No, I said Obama's budgets "required" it. Congress said no.

[Mr. Big Dog 10,747]

No, I said Obama's budgets "required" it. Congress said no.

And you're still wrong. None of the administration's budget requests for the years 2013, 2014, 2015 or 2016 "required" the debt ceiling to be raised by a trillion or more a year. None of the budget requests had a deficit at, let alone exceeding one trillion dollars. You need to check your news sources, they're feeding you garbage.