by Dom Ruscio, Partner
(Note: This is the first in a series of blogs on the president’s fiscal year 2016 budget request to Congress. In the days and weeks ahead, CRD Associates will be posting more detailed analyses of selected budget topics.)
Yesterday, President Obama sent his penultimate budget request to Congress, a $4.066 trillion blueprint that has little chance of being enacted, but will nevertheless serve to set some parameters for negotiations with the GOP-controlled Congress.
As early news leaks implied, the president’s fiscal year 2016 budget proposal sounds a populist theme of “middle-class economics,” and leverages a strengthening economy and a declining federal deficit to propose increasing federal spending, preserving entitlement programs and raising selected taxes on the wealthy.
The president’s plan also calls for rolling back $74 billion in sequestration cuts to government programs. More specifically, the president is asking Congress to exceed caps on discretionary spending, raising those accounts by seven percent in fiscal 2016. The increases would total about $74 billion in spending above the limits set in 2011, lifting defense spending by $38 billion, to $561 billion, and non-defense programs by $37 billion, to $530 billion.
Overall, the budget proposes to narrow the nation’s income inequality by calling for the wealthiest Americans to shoulder a larger tax burden to help the government provide basics like universal preschool and free community college. Revenue would be raised from new taxes, including one on the nation’s 50 largest financial firms and others aimed at inheritance and trust funds, that would help pay for tax breaks for middle-class households, including a $500 second-earner tax credit, expansions of both the college tuition credit and the Earned Income Tax Credit, and additional tax credits of up to $3,000 per child.
Highlights of the president’s budget include:
- $478 billion for a public works program to fund new roads, bridges and highways
- $1 billion in additional funding for Head Start
- new federal-state partnerships to provide two years of free community college to as many as 9 million students
- $146 billion (+6 percent) for R&D funding, including $31.3 billion for the National Institutes of Health, to support roughly 10,000 new grants; $18.5 billion for NASA; $6.2 billion for the National Science Foundation; $215 million for a Precision Medicine Initiative; and $1.2 billion for the USDA’s in-house research programs, including one focused on antimicrobial resistance
- $52 billion for fighting in Afghanistan, Iraq, Syria and elsewhere and a $14.1 billion increase in military procurement programs, for a total of $107.7 billion in fiscal 2016
- $49.3 billion in gross discretionary funding for the Department of Housing and Urban Development to expand the number of rental assistance vouchers; increase homeless assistance for vulnerable families; and make targeted investments in communities to help revitalize high-poverty neighborhoods
Again, while critics will declare the budget proposal dead-on-arrival, it provides the line-by-line details of agencies’ needs—something the appropriations committees need to formulate spending bills.