By Jo Comerford, Executive Director of National Priorities Project
President Obama released a $3.9 trillion budget proposal for fiscal year 2015 on Tuesday.
The new budget contains initiatives that would be widely popular with the American people, including jobs, education and closing corporate tax loopholes. However, the president still favors expanding Pentagon spending — even as we withdraw from Afghanistan and research suggests that the American people do not approve of devoting an astonishing 57 percent of discretionary spending to the military.
Here are the top five things to know about Obama’s budget:
1. Increases Military Spending
Excluding war costs, the budget contains $549 billion for military programs, a more than five percent increase relative to 2014. In addition, the Department of Defense receives a separate budget for war activities, also known as “Overseas Contingency Operations” (OCO). Though the president has not yet released his proposed OCO budget for 2015, in 2014 it totaled $85 billion in additional military spending, even as troop levels in Afghanistan decline. The OCO budget is not subject to funding caps or sequestration cuts, and billions of dollars in the war budget have been widely referred to as a “slush fund.”
2. Closes Some Tax Loopholes for Corporations and the Wealthy
The president projects $3.34 trillion in tax revenue in fiscal 2015, an increase of 11 percent relative to 2014. The increase is due to improvements in the economy as well as tax reform. In particular, the proposal would tighten tax breaks for wealthy taxpayers to bring in an additional $37 billion in revenue in fiscal 2015 and $651 billion over the next 10 years, and limit the ability for corporations to deduct interest expenses for their overseas operations, which would raise $43 billion over a decade.
3. Expands the Earned Income Tax Credit for Low-Income Households
The budget would expand the Earned Income Tax Credit (EITC), a successful anti-poverty program, for low-income childless workers. The change would benefit an estimated 13.5 million additional Americans and cost $60 billion over 10 years.
4. Invests in Early Childhood Education
The president wants to provide pre-kindergarten to every student and expand the existing Head Start program, which provides early childhood education to low-income families. The budget proposal would dedicate $66 billion over 10 years to this initiative, which would be paid for through a tobacco tax.
5. Runs an Average Deficit
The president’s budget proposal would run a deficit of $561 billion in 2015. As a share of the economy, the deficit is expected to be 3.1 percent in 2015. That’s down from a high of 10 percent in 2009 following the Great Recession. Over the past 50 years, budget deficits have averaged around 2.8 percent of the economy.
All in all, the president has released a budget that reflects many of Americans’ top priorities for our nation.
Though the budget ultimately enacted by Congress may look very different from the budget request released by the president, the president’s budget is important. It’s the president’s vision for the country in 2015 and beyond, and it reflects input from every federal agency.