On April 10th, President Obama submitted his FY 2014 Budget Proposal to Congress. In the normal course of events, the President would have unveiled his spending plan in early February as required by law. But, as with all fiscal matters in Washington, D.C. these days, reality has not followed a “normal” course of events. Instead, the President’s Budget, which should kick off the budget and appropriations processes, comes weeks after the House and the Senate passed their starkly different FY 2014 Budget Resolutions.
The President’s ten-year budget request calls for $3.77 trillion in government spending and proposes cutting the deficit by $1.8 trillion over ten years. The Budget does not address the $85 billion sequester occurring in the current fiscal year (FY 2013), but does eliminate sequestration in the out years. It proposes generating $580 billion by restricting deductions for the top two percent of earners and by requiring households with more than $1 million in annual income to pay at least 30 percent in taxes. The Budget also proposes to solicit $78 billion from new cigarette taxes. In eliminating sequestration, the President discards the discretionary spending caps established in the Budget Control Act of 2011 (P.L. 112-25) and requests spending of $1.058 trillion in FY 2014. This would mark a significant increase over FY 2013 discretionary spending of $984 billion.
Most significantly, in his quest to achieve a “grand bargain,” the President proposes savings of about $230 billion by restructuring cost of living adjustments for entitlement programs, including beneficiaries of Social Security, known as the chained Consumer Price Index, or chained CPI. This is viewed by some as an olive branch to the Republicans, and by others as offering too much without gaining anything in exchange. The President proposes an additional $400 billion in health care savings - $200 billion in mandatory program reductions and $200 billion in discretionary spending cuts.
The President remains committed to the areas he identified as his core priorities for his second term and requests additional cross-department/agency funding for a number of new initiatives related to manufacturing, infrastructure, education, cybersecurity, immigration reform and gun control. However, many of his proposals, especially related to infrastructure financing, have been repeatedly rejected by Congress.
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Topics: Barack Obama, Budget Cuts, CMS, Cybersecurity, Department of Agriculture, Department of Education, Department of the Interior, DOD, DOE, DOJ, DOL, Education Budget, FDA, Federal Budget, HHS, NIH
Published In: Elections & Politics Updates, Finance & Banking Updates, Tax Updates
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