Today: Thursday, 25 April 2024 year

President Obama announces his last budget proposal

President Obama announces his last budget proposal

President Obama’s second term in office is quickly approaching its 2016 end. However, during the almost one year which the current president still has left in office, his duties do not end. In fact, the leader of the United States is now focusing on the spending priorities of the US Government.

The last budget proposal of President Obama’s administration is set to increase spending by a 4.9 percent, giving the package a total value of 4.15 trillion dollars. The plan proposes a reduction in the federal deficit to 503 billion dollars, still a significant difference from the initially projected figure of 438 billion, boasted by the Obama administration.

New measures and spending increases

Measures contained in this budget proposal imply an increase in spending for cyber security, cutting certain tax breaks for the wealthy, which have been deemed ineffective, closing loopholes for high income households. New tax measures target the taxing of capital gains and carried interest at the same rates as regular income and also taxing financial institutions.

President Obama’s plan also looks towards income and corporate taxes, setting a minimum income tax of 19% and applying a one-time tax of 14% for profits “stashed” overseas in order to escape taxation. Other measures include an increase in spending in the health sector, providing financial aid to Puerto Rico and also increasing the money allocated to the Pentagon. The allocation seems rather small (less than half a percentage point), when considering the commitments that the Defense Department has taken on in the past years.

A bigger focus on social issues

It would appear obvious that President Obama’s proposed budget is one geared more towards social spending, which would dispel any doubt regarding Republicans’ criticism. One should not forget, however, that the proposed budget is heavily depending on the outcome of this year’s elections, which may completely invalidate or strengthen the democratic approach taken in elaborating this budget. Despite harsh criticism from Congress’s right wing, President Obama’s administration feels that many of the measures proposed have the potential to attract bi-partisan support.

Considering the fiscal measures targeting the corporate environment and the high-income households, however, it is fairly clear to see where the strong opposition stems from. Furthermore, it should be noted that the budget proposal is based on a series of hypotheses which may or may not prove to be true in the coming years. One such hypothesis, according to an article by The Washington Post is the increase in population due to increase in immigration, as a consequence of the revision of immigration laws.

The reform continues

Matt Agorist, in his article for The Free Thought Project seems to predict that quite the opposite will be taking place, with an increasing number of people actually renouncing US citizenship.

One thing is certain, though. Despite heavy criticism from the Republican wing of Congress, President Obama’s last budget proposal seems to continue his efforts of progressive fiscal reform. Whether or not this budget will pass and will be implemented following next year’s presidential elections remains to be seen.