2015 United States Presidential Budget Request - Obama Budget

President Barack Obama submitted his fiscal year 2015 budget request on March 4, 2014. This budget proposal was one of several proposed budgets considered in the process of creating the 2015 United States federal budget. President Obama's proposed budget was for $3.9 trillion. President Obama's budget proposal was described as being full of "populist proposals" and as a "populist wish list." The proposal was not seen as a politically practical measure that would be used or taken seriously by Congress. The White House described this budget as "a budget he would implement in an ideal world."

History

The U.S. Constitution does not give the President a role in the appropriations or budgeting process. Instead, after World War I and under President Warren G. Harding, Congress passed the Budget and Accounting Act of 1921 to establish an executive branch budgeting process, in reaction to growing spending. This law created the Bureau of the Budget (now the Office of Management and Budget (OMB)) and the General Accounting Office (now Government Accountability Office (GOA)) to assist in this process. The Congressional Budget and Impoundment Control Act of 1974 later established budgeting rules for Congress itself.

Today, the United States budget process traditionally begins when the President submits a budget request to Congress. The Budget and Accounting Act of 1921 requires the President to submit the budget to Congress for each fiscal year which is the 12-month period beginning on October 1 and ending on September 30 of the next calendar year. The current federal budget law (31 U.S.C. § 1105(a)) requires that the President submit his or her budget request between the first Monday in January and the first Monday in February. In recent times, the President's budget submission has been issued in the first week of February. The budget submission has been delayed, however, in some new presidents' first year when the previous president belonged to a different party.

The President's budget is formulated over a period of months with the assistance of the Office of Management and Budget, the largest office within the Executive Office of the President. The budget request includes funding requests for all federal executive departments and independent agencies for the following year. Budget documents include supporting documents and historical budget data and contains detailed information on spending and revenue proposals, along with policy proposals and initiatives with significant budgetary implications. In addition, each federal executive department and independent agency provides additional detail and supporting documentation on its own funding requests. The documents are also posted on the OMB website.

The budget the President submits is a request only. However, some people consider "the power to formulate and submit the budget... a vital tool in the President’s direction of the executive branch and of national policy." The President's budget request can influence the decisions made by Congress; the degree of influence changes based on political and fiscal factors. President Obama's budget proposal is a "comprehensive assembly of the White House's policy proposals and economic projections."

President Obama did not release his 2015 budget proposal until March 4, 2014, a delay he said was due to the need to wait for the Bipartisan Budget Act of 2013 to be agreed to in December 2013.

Proposed budget overview

President Obama's budget proposal was described as being full of "populist proposals" and as a "populist wish list." Some of the populist programs include more spending on pre-school education, tax credits for childless low-income workers, and more than $1 trillion in new and higher taxes.

The President's proposal is also considered a "playbook" for Democrats' "election-year themes of creating jobs and narrowing the income gap between rich and poor."

According to Obama, his proposal adheres to the spending limits established by the Bipartisan Budget Act of 2013, but he also suggests an additional $55 billion worth of spending.

Scope of the budget proposal

President Obama's budget proposal only addresses about a third of the federal government's total estimated spending for fiscal year 2015. The federal government's total estimated spending would be $3.5 trillion, while Obama's budget only addresses $1.014 trillion. The difference is due to most government spending being non-discretionary spending for entitlement programs such as Social Security, Medicare, and Medicaid.

Specific policy proposals

Defense

The President's proposal calls for the United States Army to decrease in size to the smallest it has been since before World War II. The number of active-duty soldiers would drop from 490,000 today to 440,000 over the next five years. At the height of the Iraq War, there were about 570,000 soldiers. Obama's plan would also get rid of the A-10 airplane. The total military budget would be about $496 billion, which is the same amount as fiscal year 2014. The United States Department of Defense is asking in its budget to have some bases closed in 2017 and have a smaller pay increase for the troops.

Taxes

The President's proposal "would raise $651 billion by limiting tax deductions for the nation's highest earners" and by adding a "Buffett tax" that would set up minimum tax levies on the highest-earning Americans. Obama's budget would also increase the taxes on "large estates, financial institutions, tobacco products, airline passengers and managers of private investment funds."

The budget includes a proposal to tax large banks with $56 billion in "financial crisis responsibility fees."

Social programs

Obama proposes to increase from $500 to $1,000 the maximum earned income tax credit for childless low-income workers. Doing this would cost $116 billion over the next 10 years.

Education

Obama's proposal includes provisions involving universal pre-kindergarten, Head Start, and more Race to the Top grants. The proposed funding would pay for 100,000 new public school teachers. He also proposed capping the Public Service Loan Forgiveness program.

Budget savings

The President's plan states that the passage of his proposed immigration law, the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013, would generate $158 billion worth of savings due to increased government revenues from taxing immigrants.

Political reactions

Support for the proposal

Explaining some of the choices he made in his budget proposal, President Obama said that "we've got to make a decision if we're going to protect tax breaks for the wealthiest Americans or if we're going to make smart investments necessary to create jobs and grow our economy and expand opportunity for every American."

Opposition to the proposal

Speaker of the House John Boehner (R-OH) called Obama's proposal "his most irresponsible budget yet," arguing that "American families looking for jobs and opportunity will find only more government in this plan." The Speaker also that said that "this budget is a clear sign this president has given up on any efforts to address our serious fiscal challenges that are undermining the future of our kids and grandkids."

Senator Jeff Sessions (R-AL), the ranking member on the Senate Budget Committee said that "it's disappointing that the president produced a campaign document instead of putting forth a serious budget blueprint that makes the tough choices necessary to get our fiscal house in order."

Expected impact

Reuters referred to the yearly requirement that the President submit a budget proposal as an "annual ritual," saying that as soon as it is released, "lawmakers will promptly ignore it." However, the proposal does "highlight" policy proposals and allow Democrats to contrast their plans with those of Republicans.

The Associated Press reported that many of Obama's suggested new taxes have been ignored in the past by Congress, as have many of his ideas for increased spending. Due to the mid-term elections in November 2014 and the ongoing campaigns for re-election, Congress was not expected to act on many of Obama's proposals. Politico reported that "very little of it is expected to become law - or even be seriously considered via legislation on Capitol Hill."

Even the Obama Administration itself admitted that this budget proposal was not expected to be used to build a budget. Politico reported that "the White House isn't even pretending that this year's budget is a governing document" and that this is "a budget he would implement in an ideal world."