WASHINGTON — President Barack Obama submitted a 2015 budget Tuesday that would raise taxes on wealthy individuals and oil and gas companies, while broadening tax credits for the poor and expanding access to preschool.
The budget blueprint sent to Capitol Hill proposes spending $56 billion more than the bipartisan budget agreement from December would allow, with about half going to the Defense Department and the rest spread out over various domestic initiatives.
The president proposed to pay for the $56 billion by capping the amount wealthy individuals can put into tax-preferred retirement savings accounts, cutting crop insurance subsidies to farmers and insurers and raising airline passenger fees.
Republican congressional leaders deemed the budget dead on arrival.
House Speaker John Boehner, R-Ohio, said it was “perhaps his most irresponsible budget yet” and criticized the president for not offering ways to tame spending on entitlement programs like Social Security and Medicare, the biggest drivers of the federal budget.
Obama included a proposal in last year’s budget to pare cost-of-living increases for Social Security and other federal retirement programs; that was not part of this year’s budget submission, which relies heavily on tax hikes on the wealthy to reduce future deficits.
The president’s budget projects a deficit of $564 billion for the 2015 fiscal year and about $2.5 trillion in deficit spending from 2015 through 2019.
“As a country, 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,” Obama said during a visit to an elementary school in Washington.
Expanding tax break
Obama’s budget calls for helping low-wage earners by expanding the Earned Income Tax Credit for people without children. It also would expand early childhood education and provide teachers to 500 school districts, allot more money for road-building and invest more money in research.
Rep. Paul Ryan, R-Wis., the chairman of the House Budget Committee, called the president’s budget “a campaign brochure.” Ryan is expected to offer a blueprint addressing poverty programs that he all but deemed a failure in a report released on Monday.
However, Congress is unlikely to address sweeping proposals to address tax reform or entitlements this year.
Obama has called for repealing tax breaks for oil and gas companies every year since he became president, and he did so again this year, with no prospect for success.
American Petroleum Institute president and CEO Jack Gerard said, “The average oil and natural gas job pays about seven times the federal minimum wage, and the natural gas renaissance has led to lower CO2 levels.
“Higher energy taxes would set back the president's own goal of addressing income inequality and undermine his ability to achieve his climate goals.”
The president’s budget calls for major changes in the corporate and individual tax code and would raise about $1 trillion in new revenue. His proposals would raise $651 billion a year by limiting the tax deductions of high-income earners and requiring those making more than $1 million to pay at least 30 percent in taxes.