President Barack Obama sent Congress a new budget last month that would achieve $4 trillion in deficit reduction over the next decade through a combination of cuts in government spending and higher taxes on the wealthy. The President wants to increase spending in key areas such as transportation and education and that’s a good thing. But primarily because it’s an election-year, Republicans will oppose the budget regardless of merit. In fact, the opposition surfaced even before the ink was dry on the papers. The GOP leadership immediately announced that the budget was “dead-on-arrival.”
Everybody in Congress should realize that there is an ongoing battle to protect and save the middle class in this country. Without a strong and viable middle-class, our country will suffer greatly. Unfortunately, there are some members in both the House and Senate who are working hard to protect the super-rich, and seem to have no concern for those in the already shrinking middle class. Neither do they have any concern whatsoever for the poor in our country. President Obama says the federal budget should focus on “the solid foundation of educating, innovating and building,” and I believe most Americans agree with him. It certainly appears that this budget is based on that foundation.
It was reported that the Obama budget sticks to the caps on annual appropriations approved in August that will save $1 trillion over the next decade. It also puts forward $1.5 trillion in new taxes, primarily by allowing the Bush-era tax cuts to expire at the end of this year for families making $250,000 or more per year.
President Obama, as he has in the past, also proposed eliminating tax deductions the wealthy currently receive. The budget proposed would also put in place a rule named for billionaire Warren Buffett that would seek to make sure that households making more than $1 million annually pay at least 30 percent of their income in taxes. The President would also impose a new $61 billion tax over ten years on big banks aimed at recovering the costs of the financial bailout and providing money to help homeowners facing foreclosure on their homes. The budget would raise $41 billion over ten years by eliminating tax breaks for oil, gas and coal companies and it claims significant savings from ending the wars in Iraq and Afghanistan.
The budget would cut spending by $2.50 for every $1 in extra taxes it seeks. Among the areas targeted for increases, President Obama is proposing $476 billion in increased spending on transportation projects including efforts to expand inner-city rail services. To spur job creation in the short-term, he is proposing a $50 billion “upfront” investment for transportation, $30 billion to modernize at least 35,000 schools and $30 billion to help states hire teachers and police, rescue and fire department workers. Republicans in Congress have blocked these proposals in the past.
President Obama will also ask for $8 billion to create a fund to encourage community colleges and businesses to work together to train workers in high-growth industries. The Obama budget seeks $360 billion in savings in Medicare and Medicaid mainly through reduced payments to health care providers. Everybody agrees it’s necessary to restrain health care costs.
Fortunately, in a rare bi-partisan show of common sense and decency, the leaders in both parties agreed to do something President Obama and Democrats in Congress have been fighting very hard for. Negotiators on Capitol Hill reached an agreement last month on legislation to renew a payroll tax cut for 160 million workers and jobless benefits for millions more. The legislation would continue a 2 percentage-point cut in the Social Security payroll tax, renew jobless benefits averaging about $300 a week for people languishing for long periods on unemployment rolls and protect doctors from a huge cut in their Medicare reimbursements.
Extending the payroll tax cut and renewing long-term jobless benefits were key planks in President Obama’s jobs program, which he announced last September. The measures will help the economy by giving people more money to spend, increasing a typical bimonthly paycheck by about $40, and giving the unemployed critical cash. The measure also includes a key adjustment to the badly broken Medicare payment formula for doctors, which would otherwise impose a 27 percent cut on March 1 under a 1997 budget law. The $20 billion cost would be covered in part by cuts to a fund created under the new health care law that awards grants for preventive care and by curbs on Medicaid payments to hospitals that care for a disproportionate share of uninsured patients.
It’s almost certain that we will have to wait until next year – after the elections are over – for Congress to get down to work on other critically important issues facing our nation. That’s most unfortunate, but a fact of political life in this county.
Source: Associated Press
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