President Obama’s $3.9 trillion budget that would start Oct. 1 focuses on increasing taxes for upper-income Americans as well as oil and gas companies. The plan also focuses on increased spending for education, infrastructure and research as well as expanding the Earned Income Tax Credit. The end goal is to increase employment and economic growth; however, the ambitious plans stopped short of Obama’s expectations.
The Republicans on Capitol Hill have disapproved of Obama’s plan from the start, as they want to avoid political compromises in the event that they take control of the Senate in November. Despite political differences, the Republicans did find a common ground to agree upon. A group of Republicans have started focusing their energies on ways to strengthen antipoverty programs that are already intact. Republican David Camp of Michigan has taken the initiative by proposing a tax alteration to pay for transportation projects.
Despite their common ground, Republicans are concerned that the White House is shifting away from reducing the massive deficits at hand.
“After years of fiscal and economic mismanagement, the president has offered perhaps his most irresponsible budget yet,” House Speaker John Boehner said in statement. “American families looking for jobs and opportunity will find only more government in this plan.”
Obama’s spending plans are constrained through a two-year deal, which was formulated in December between House Budget Chairman Paul Ryan and Senate Budget Chairman Patty Murray. The agreement arose after the governmental shut down, as lawmakers wanted to avoid another altercation over the debt ceiling.
As previously mentioned, President Obama plans on raising $1 trillion in new taxes over the next decade. The vast majority of the revenue will be a direct outcome of higher taxes on estates and upper-income residents. Obama has enacted a “Buffet Rule,” commonly known as a “Fair Share Tax,” which inhibits certain earners from lowering their tax rate below a set level.
The White House is projecting a 35 percent increase in corporate tax revenues next year, which will raise revenues to $449 billion. It plans on doing this through lowering rates and eliminating deductions, which will combine with economic growth to create the increase desired. The budget is altering programs such as Medicare and Social Security in the hopes of reaching the spending goals. Each of these programs has roughly 50 million beneficiaries, despite remaining unpopular in the political arena. Together they are expected to represent 36 percent of total federal spending in 2015. In addition, the White House created the “Opportunity, Growth, and Security Initiative,” which is separate from the budget. This initiative aims to boost military spending and research funding for the National Institutes of Health.
The Republicans and Democrats are in constant turmoil over the future of our country. The main question that lies ahead is whether or not the changes will be beneficial. Republicans fear that the alterations will help in the short-term, but will fall short in the long run.
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