Washington: President Barack Obama`s 2016 budget unveiled Monday sets priorities for the middle class and proposes major infrastructure improvements, to be paid for largely through increased contributions by the wealthy and corporate America.
Republicans, who now control both chambers of Congress, are likely to balk at the wish list and criticize it as a return to liberal tax and spend policies.
The following is a breakdown of the main points of the budget proposal: Obama`s budget for fiscal year 2016, which begins October 1, comes in at $3.999 trillion -- about 21.3 percent of gross domestic product, up from the current year`s 20.9 percent.
Some 70 percent of the spending is obligatory, as it covers public safety net programs such as Social Security and health coverage for the elderly (Medicare), as well as debt servicing.
The "discretionary spending" is $1.168 trillion, divided about evenly between defense and non-defense programs. Pledging new help for America`s struggling middle class, Obama wants to expand affordable child care, in part by tripling the child care tax credit, making it eligible for families making up to $120,000 annually. The change would help some 5.1 million families.
He also proposes a "Preschool for All" initiative.
Among a series of educational pitches, he wants to make tuition at two-year community colleges free for many students. A total of $585 billion is set aside for military spending, while $53.4 billion is meant for State Department programs and other international operations.
Obama`s Pentagon budget marks an increase of more than four percent over 2015, but with wars declared over in Iraq and Afghanistan, the spending is 24 percent lower than in 2010, when adjusted for inflation.
The year-on-year increase is aimed in part at ending the restrictions on defense spending that were imposed by funding caps beginning in 2013.
Operation Inherent Resolve, the mission targeting the extremist Islamic State group in Iraq and Syria, is funded at $5.3 billion.
Assistance to Ukraine, aimed at "countering Russian aggressive acts," comes in at $117 million, in addition to the $1 billion loan guarantees provided to Kiev last year and a similar forthcoming loan in 2015.
Fourteen billion dollars is set aside to counter cyber-attacks, while $70.2 billion is directed to Veterans Affairs programs, a hike of 7.8 percent."Built by far-sighted investment over generations, America`s world-class infrastructure is falling behind the rest of the world," the budget statement acknowledges.
Obama is requesting $478 billion over six years to make significant repairs and to build new bridges, roads, and railways.
The program aims to speed infrastructure permitting and expand public-private collaboration on such projects.The White House proposes a series of tax reforms -- among them, increasing the top tax bracket for capital income to 28 percent, from 23.8 percent, and closing a loophole that permits heirs to avoid taxes on capital gains.
On the business side, Obama`s tax reform would encourage companies to repatriate their profits to the United States, with a one-time "transition toll charge" of 14 percent on the nearly $2 trillion of untaxed foreign earnings made by US firms abroad.
Such future profits would be taxed at a minimum of 19 percent, and could be reinvested in the United States without additional tax burden.
The corporate tax rate would drop from 35 percent to 28 percent, aligning more closely with other industrialized nations.
