March 4 (Reuters) – U.S. President Barack Obama released his
fiscal year 2015 budget request to Congress on Tuesday, and
lawmakers will promptly ignore it.
But the annual ritual highlights his policy priorities for
the coming year and serves as a Democratic Party manifesto as
Democrats seek to draw a contrast with Republicans ahead of
congressional elections in November.
The budget plan covers less than a third of the
approximately $3.5 trillion the government is likely to spend
next year. The rest will be doled out automatically through
federal benefits programs that mostly care for the elderly and
poor, including Social Security, Medicare and Medicaid.
Obama outlined how he would parcel out $1.014 trillion on
government agencies’ discretionary programs ranging from the
military to national parks.
The level, barely above this year’s spending cap of $1.012
trillion, was set by a recent budget deal and forces Obama to
make some difficult cuts to fund the programs he wants. If the
president wants to spend more, he will have to sell Congress on
the idea of raising additional revenues.
The following are some of president’s spending and tax
proposals:
DEFENSE SPENDING
The president wants to shrink the U.S. Army to its lowest
level since before World War Two, eliminate the popular A-10
aircraft and reduce military benefits. The Pentagon’s budget for
the 2015 fiscal year beginning in October is an estimated $496
billion, about the same amount as the current fiscal year.
TRANSPORTATION PROJECTS
Obama wants a four-year, $302 billion plan to repair
deteriorating roads and bridges and fund transit projects. He
has said he would raise $150 billion in new money by ending some
tax breaks for businesses as part of a corporate tax reform that
would also lower tax rates.
Democrats and Republicans agree on the need to spruce up the
nation’s surface transportation system, but disagree on how to
fund the work.
MANUFACTURING TECHNOLOGY
The president wants to “fully realize” his plan to build 45
manufacturing innovation centers. These are hubs that take
advantage of universities and businesses located close to one
another to share technology and ideas before products reach the
commercial phase.
Obama has announced four such centers so far.
OIL AND GAS ROYALTIES
Through the Interior Department, Obama proposed changes to
the oversight of oil and gas development on federal lands and
waters, including royalty reforms and improved revenue
collection, to save an estimated $2.5 billion over a decade.
EDUCATION
Obama renewed his call for universal pre-kindergarten and
expanding the Head Start program, which provides early childhood
education for low-income families.
The new budget seeks a total of $68.6 billion through a
raise in federal tobacco taxes to vastly expand access to
preschool, make all levels of education more accessible and
affordable and to connect nearly all students to broadband and
high-speed wireless Internet.
HEALTH SERVICES
The president sought $77.1 billion for the department that
runs Obamacare, Medicare and Medicaid, the Centers for Disease
Control and Prevention and biomedical research.
The proposal for the Department of Health and Human Services
includes some items aimed at Democratic voters: training to help
schools detect mental illness early, extra access to HIV
treatment and prevention services and funds to train primary
care doctors.
GUN CONTROL
Almost a year after the Senate defeated gun control
legislation prompted by the Newtown, Connecticut, school
massacre, Obama proposed spending $182 million to address mass
shootings. That includes school safety research, a $22 million
boost for the agency that inspects gun shops and funds for
technology to prevent unauthorized users from firing a gun.
TRADE
Obama’s budget calls for an extra $15 million to accelerate
efforts to fix unfair trade practices and remove barriers to
U.S. exports, and he wants another $20 million to expand
SelectUSA, the agency charged with drawing more foreign
investment to the United States.
He also requested an extra $9 million to smooth reforms to
the export licensing procedure for sensitive products, such as
defense exports.
IMF VOTING REFORMS
Obama wants Congress to approve a shift that would move some
$63 billion from an International Monetary Fund crisis fund to
its general accounts. The White House has asked for this change,
which would make good on a 2010 commitment, for the past year.
INTERNATIONAL FOOD AID
Obama proposed reforms to the nation’s largest global food
aid program that could allow some 2 million more people to be
helped each year. Funding would become more flexible and could
be used in part to buy food near crisis areas or to provide cash
transfers or vouchers.
SWAPS OVERSIGHT
The president proposed a smaller boost to the budget of the
U.S. Commodity Futures Trading Commission (CFTC), the primary
derivatives regulator, than he sought for the cash-strapped
agency last year.
The 2010 Dodd-Frank law charged the CFTC with bringing the
vast swaps market under federal oversight. The White House said
its latest budget proposal would allow the agency to carry out
its new duties but did not explain the more moderate request.
Obama did ask for more money this year for the U.S.
Securities and Exchange Commission, which has more employees.
CROP INSURANCE
Just weeks after passage of a five-year farm bill, Obama
proposed cuts to crop insurance subsidies paid to insurance
companies and farmers. Modifying the format of the program would
yield a projected savings of $14 billion over a decade, the
White House said.
MINIMUM WAGE
Obama’s budget calls on Congress to lift the minimum wage to
$10.10 per hour and index it to inflation going forward. The
president already signed an executive order setting that as the
minimum for federal contract workers.
The White House budget also proposed a 1 percent pay raise
for all federal workers.
EARNED INCOME TAX CREDIT
Obama called for doubling the Earned Income Tax Credit for
childless workers. The program has bipartisan support because it
rewards low-income people who work.
The EITC is one of the most popular anti-poverty programs in
the United States, but it is far more beneficial for workers
with children than those without.
OVERSEAS TAX PROPOSAL
The administration wants new limits on overseas tax
avoidance by corporations by seeking to prevent them from
playing one country’s tax rules for certain securities against
another’s.
At the moment, big corporations must pay the top 35 percent
corporate tax rate on foreign profits, but not until those
profits are brought into the country. Many lawmakers argue this
structure encourages companies to make job-creating investments
in foreign countries rather than in the United States.
Obama’s budget proposes a total of $12.5 billion for the
Internal Revenue Service, up from $11.3 billion allocated in the
fiscal 2014 budget.
COINS
Obama floated the idea of using cheaper metals to make
pennies and nickels. The Treasury Department has been reviewing
the coins’ production, which has not changed in decades.
Obama has proposed similar reviews in the past but the
measures stalled. The budget does not identify potential cost
savings, but it lists the rise of electronic commerce as a
reason to review the coins’ makeup and distribution.
