President Barack Obama announced his 2013 fiscal year budget Monday, for what he calls a “make or break moment for the middle class.” The budget calls for $3.8 trillion in spending, including $8 billion dedicated to a new “Community College to Career Fund,” as well as more proposals to include putting money towards innovative programs that help continue to spur job creation and help to restore the U.S. economy.
Mr. Obama gave his speech at Northern Virginia Community College, and seems to be favoring a program that would help Americans obtain higher paying jobs in growing 21st century career fields dealing with new technology.
The “Community College and Career Fund” encourages businesses and community colleges to use government funding to provide career training for more than 2 million workers in job fields that are currently hiring, but simply cannot find workers with the education or skills needed to fulfill the job requirements.
His speech also sounded like a warning to members of Congress, to help keep the U.S. economy growing in line with the positive jobs reports of January and December, where the national unemployment rate dropped to 8.3 percent.
“The economy is growing stronger, the economy is speeding up,” said Mr. Obama. “The last thing we can afford to do is go back to the very policies that got us into this mess in the first place. We can’t afford it.”
The president’s budget also directs money towards hiring more public service workers, such as teachers and firefighters while also investing in more infrastructure development, such as road and railway projects.
Economic fairness
The president’s new budget also calls for more “economic fairness,” echoing one of the major themes in his 2012 State of the Union address from last month.
The White House released a “budget overview” that states that the president’s budget plan would observe his long touted “Buffett Rule” which states that no household earning more than $1 million per year collectively would pay less than 30% of income in taxes.
“Today, we are seeing signs that our economy is on the mend. But we are not out of the woods yet. Instead, we are facing a make-or-break moment for the middle class, and for all those who are fighting to get there,” writes the president in a letter to Congress accompanying his 2013 fiscal year budget.
Mr. Obama and Democrats have been calling for more tax reform in recent months, after it was revealed in late 2011 that millionaire investor Warren Buffet actually pays a lower tax rate than his secretary. The president’s tax reform proposals focuses on addressing the loopholes in the tax code that allow people to pay lower taxes on capital gains, which is what allows Mr. Buffett to pay that lower rate than his secretary.
“This is not about class warfare. This is about the nation’s welfare,” said Mr. Obama Monday, a reference to the Republican opposition that claims he is promoting “class warfare” in the U.S. by calling for higher taxes on that nation’s wealthiest tax payers.
Additionally, in keeping with his theme of “economic fairness,” the president’s new budget implements a financial crisis responsibility fee. The fee targets the largest financial institutions in the U.S. and aims to raise $61 billion over the next 10 years to offset the cost of the president’s recent mortgage refinancing program.
The National Deficit
The current U.S. national deficit is currently $15.3 trillion and the projected budget deficit for 2012 was over $1.3 trillion, which the president announced will fall to $901 billion in fiscal year 2013, Reuters reports.
The budget also calls for $1 trillion in spending cuts over the next 10 years and an additional $4 trillion in deficit reduction by the year 2018.
Additionally, the president calls for defense spending cuts of $487 billion less than what was spent on defense spending in 2012.
Republican opposition
House Republicans are planning to release their own 2013 fiscal year budget Monday, and several Republicans in the U.S. Senate have already come out and voiced their opinions against the president’s new budget.
Senate Minority Leader Mitch McConnell, a Kentucky Republican calls the president’s 2013 budget nothing more than election year propaganda.
“”This proposal isn’t really a budget at all. It’s a campaign document,” said Mr. McConnell.
Senate Banking Committee member Jeff Sessions, an Alabama Republican, believes the president is projecting that his budget would much more from spending than it actually would over the next 10 years.
“The president claims that his fiscal plan will reduce the deficit by $4 trillion over the next 10 years, including the previously enacted $1 trillion Budget Control Act cuts that are part of current law. An honest analysis reveals, however, that the president’s budget would only reduce the deficit by about $300 billion in comparison to what was agreed to in the Budget Control Act last August. In other words, the White House has utterly failed to meet even the minimum target they have identified as necessary,” said Mr. Sessions Monday.
The president’s budget must now clear both chambers of Congress, where it is likely to face staunch opposition in the Republican controlled House.
