President Obama has recently released an ambitious $3.9 trillion budget for the 2015 fiscal year. Like previous years, this budget seeks to increase the welfare of the middle class by reducing tax breaks for the wealthy and corporations. The aim of the budget is to reduce the federal deficit without comprising social and military programs. Although it seems unlikely to pass in Congress, President Obama’s budget is elaborate, and it certainly shows his vision for the country in the coming year. Here are some of the details regarding the proposed budget.
Benefits for the Working Class
In the 2015 budget, President Obama aims to improve living conditions for the working class. The President wants to double the earned-income tax for low income adults, and will pay for it in part by removing tax breaks for the self-employed. A large portion of the Obama budget is also delegated towards social welfare programs such as Social Security.
President Obama budgeted around $77.1 billion for the Department of Health and Human Services. Some of this money will go towards the Center for Disease Control, Medicare, Medicaid and the Affordable Care Act. The rest of the $77.1 billion will help fund biomedical research, preventative healthcare measure and treatment options. If the budget is passed, Americans would have better access to mental health screenings, treatment for diseases like HIV, and access to alcoholism treatment centers.
Tax Loopholes Reduction
President Obama has proposed a revamping of the corporate tax system, which would result in increased government revenue. As many of us know, the present tax system is confusing. Write-offs and deductions can sometimes result in business owners and corporations paying little tax. President Obama’s budget would remove some of the loopholes that allow this to happen, while reducing the total income percentage business could be liable for. The budget estimates the change in tax system would bring $150 billion to the Treasury.
The Bottom Line
Although the budget proposes almost $4 trillion of government spending, it could actually reduce the federal deficit. According to President Obama, the national debt is falling at the fastest rate it has been in the past 60 years. The President feels it’s important for the national debt to continue to go down, but he doesn’t want to put too much strain on the middle class or cut back on too many social programs.
In 2015, the Treasury is expected to see about $3.3 trillion in revenue. That would mean a deficit if the entire budget was spent. However, about a third of the budget — or $1.2 trillion — would go toward what the President considers discretionary programs. The President and Congress would directly supervise this spending and would delegate funds as revenue allows. The President estimates the national debt will continue to fall at about 3.1%. That means the deficit will be reduced to about $564 billion, less than half of what it was when President Obama took office.
Will It Pass?
President Obama’s budget covers a lot, but the chances of it passing in Congress may not be too high. Republicans will likely oppose many of the proposals, including tax benefit caps and social programs. The 2015 budget is also $55 billion over the budget Congress settled on to end the government shut-down this past October. Half of this money would come from spending reductions while the other half would come from certain tax cap benefits. Either way, it’s at least worth noting that the Affordable Care Act, which originally caused the shut-down, has actually reduced federal healthcare spending.
Whether or not the budget passes, it’s encouraging that the federal debt should at least continue to go down and the economy should still recover. After one of the longest recessions in history, nearly all of us are looking forward to a time of economic prosperity. That may or may not happen in 2015, but we can always hope.