President Obama presented the final budget proposal of his presidency Tuesday, a $4.15 trillion package that he is calling “a roadmap to a future that embodies America’s values and aspirations.”
The proposal would boost total spending by 4.9 percent, mainly as a result of increases in mandatory programs, most notably Social Security, and a rise in interest payments on the national debt. The president requested only a slight increase, less than 1 percent, in discretionary spending programs overall, although Republicans blasted him for promoting profligate spending.
Under the proposal, the federal deficit would shrink to $503 billion in fiscal 2017, down from the current fiscal year but substantially more than the $438 billion figure for last year that Obama has been using when boasting about deficit reduction. In the plan, the federal deficit over the next decade would average 2.6 percent of gross domestic product, the same as its share of the economy for fiscal 2017.
Many budget experts say that any president’s final budget proposal is as much a philosophical as a pragmatic one, given election-year politics and anticipation about what a new commander in chief’s priorities might be. And Republicans in Congress immediately pronounced Obama’s proposal dead on arrival.
House Speaker Paul D. Ryan (Wis.) said that “this isn’t even a budget so much as it is a progressive manual for growing the federal government at the expense of hardworking Americans.” He said in a statement that “we need to tackle our fiscal problems before they tackle us.”
But White House budget director Shaun Donovan said that “conventional wisdom is wrong” and that the Republicans’ refrain about the president’s budget being a non-starter was “a talking point we’ve heard every single year.” He said that “we think there are a lot of proposals that can get bipartisan support.”
One of those proposals is a major request for a 35 percent increase in cybersecurity funding to boost the federal government’s capability to defend itself against cyberattacks.The money would be spread over a variety of agencies, including the Pentagon, the FBI, the Department of Veteran Affairs and the Office of Personnel Management.
The proposed $19 billion request, which represents one of the largest increases ever sought in this area, comes as an alarming series of intrusions have occurred in recent years against targets including Target, Sony, the Pentagon and the OPM.
Another proposal with bipartisan appeal: strengthening the Earned Income Tax Credit for workers not raising children. Ryan has proposed a nearly identical measure.
Donovan said the overall budget plan would stabilize debt as a percentage of the economy at about 75 percent of GDP. He said it would achieve huge savings in various areas, amounting to $2.9 trillion in deficit reduction over 10 years compared with the current baseline. Even so, the administration projects that the deficit would grow steadily and that interest payments on the national debt would double over the next four years.
The administration’s proposed deficit-reducing plan includes $955 billion from curbing “inefficient tax breaks for the wealthy” and closing loopholes for high-income households. It also includes $375 billion in savings on federal health-care spending. And it assumes $170 billion over 10 years from immigration reform, primarily from a wave of new taxpayers that would result.
The targeted tax loopholes include one that allows some wealthy individuals, in households making more than $250,000 a year, to avoid a 3.8 percent tax imposed under the Affordable Care Act by passing some investment income through partnerships or businesses.
Donovan added that the health-care savings would grow over time.
Some congressional Republicans were condemning the plan even before its official release.
“The president’s final budget continues his focus on new spending proposals instead of confronting our country’s massive overspending and skyrocketing $19 trillion in debt,” said Senate Budget Committee Chairman Mike Enzi (Wyo.) in a statement issued early Tuesday. “This budget joins his others by placing America on a fiscal path that is unsustainable and threatens our long-term economic growth.”
Sen. David Perdue (Ga.) said in a statement: “The only positive thing about this budget request is that it’s the last one we will receive from President Obama.”
The president’s budget includes a grab bag of old and new ideas, many of which have been announced in the past two weeks. Obama is asking Congress to embrace corporate tax reform and a $10-a-barrel oil “fee” phased in over five years for use on “clean tech” infrastructure.
In addition, he wants $1.2 billion to expand programs for the treatment and prevention of drug abuse, nearly $1 billion to detect and treat cancer, and $2 billion for new Pell grants for year-round students. He is seeking more for fighting the Zika virus; combating opioid abuse; and tougher financial regulation by increasing the budget of the Securities and Exchange Commission and Commodity Futures Trading Commission.
Obama also proposed wage insurance, which would compensate workers who lose their jobs and end up taking ones at lower pay.
The Pentagon’s proposed budget is $582.7 billion, which represents about a 1 percent increase over the $580.3 billion budget for fiscal 2016. It comes at a time when the U.S. military is balancing operations against the Islamic State militant group in Iraq, Syria and other countries, the continued military campaign in Afghanistan, aggressive actions by Russia and China, and modernization in a force that has been at war since 2001.
According to official documents, the Pentagon’s proposal calls for the Air Force to get the largest funding boost from last year, from $161.8 billion to $166.9 billion. The Army’s funding also will increase slightly, from $146.9 billion to $148 billion, while the Navy Department faces a reduction from $168.8 billion to $164.9 billion.
Overall, the Pentagon budget seeks to strike a compromise between providing more of what the Defense Department needs now, such as precision-guided bombs to strike the Islamic State, and costly long-term programs, such as the $55 billion Long Range Strike Bomber. The Air Force wants to eventually replace the B-52 and other aging bombers.
The Defense Department will extend the life of the A-10 Warthog attack plane for at least two more years. The Air Force has sought to retire the plane to focus its money on long-term priorities such as the F-35 Joint Strike Fighter, but the A-10 has proved useful against militants in Iraq and Syria and the volume of airstrikes required has prompted defense officials to reconsider getting rid of the A-10 for now.
The State Department’s $50 billion proposed budget includes sizable increases that reflect the fight against violent extremism in the Middle East and the world’s worst humanitarian crisis since World War II.
Obama is asking for $4.1 billion, up from $3.5 billion this year, to fund the campaign against the Islamic State and the response to the ongoing civil war in Syria. It includes programs to rebuild and stabilize towns destroyed when militants are ousted, and efforts to counter the extremists’ propaganda. With 60 million people around the world who are either refugees or internally displaced, the budget allots $6.2 billion for humanitarian assistance in countries that include Syria, Iraq and South Sudan. That is up from $5.6 billion in the current fiscal year.
Ellen Nakashima, Dan Lamothe and Carol Morello contributed to this report.