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Entries in Federal Budget (47)

Wednesday
Apr102013

Social Security Part of Cuts in Obama's Budget Plan

Andrew Harrer/Bloomberg via Getty Images(WASHINGTON) -- President Obama outlined a $3.77 trillion budget plan on Wednesday that aims to reduce the deficit by raising taxes on the wealthiest Americans and cutting popular entitlement programs, saying “we've got to get smarter about our priorities as a nation.”

“For years the debate in this town has raged between reducing our deficits at all costs and making the investments necessary to grow our economy,” Obama said in a brief statement in the White House Rose Garden. “And this budget answers that argument because we can do both. We can grow our economy and shrink our deficits.”

The White House says the president’s budget proposal would reduce the deficit by an additional $1.8 trillion in the next 10 years.

The budget formalizes the offer the president made to House Speaker John Boehner, R-Ohio, during the so-called fiscal cliff negotiations in December, including cuts to both Social Security and Medicare paired with tax increases.

The White House hopes the cuts will attract bipartisan support, but the budget is largely seen as a symbolic negotiating tool and it stands little chance of becoming law.

“When it comes to deficit reduction, I’ve already met Republicans more than halfway, so in the coming days and weeks I hope that Republicans will come forward and demonstrate that they’re really as serious, as serious about the deficits and debt as they claim to be,” the president said.

Obama has invited 12 Republican senators to dinner at the White House Wednesday night, as part of his effort to seek out lawmakers who are willing to compromise.

The president’s budget also includes many of the proposals outlined in his State of the Union address, including $50 billion in infrastructure investments, $1 billion for manufacturing innovation institutes, a “Preschool for All” initiative financed by raising the federal tax on cigarettes, and raising the minimum wage to $9 an hour.

The new investments are fully paid for and offset, according to the White House, and the budget would reduce the deficit to 2.8 percent  of GDP by 2016.

“Our economy is poised for progress, as long as Washington doesn’t get in the way. And frankly the American people deserve better than what we’ve been seeing: a short-sighted, crisis-driven decision-making like the reckless across-the-board spending cuts that are already hurting a lot of communities out there, cuts that economists predict will cost us hundreds of thousands of jobs during the course of this year,” Obama said.

Copyright 2013 ABC News Radio

Thursday
Dec062012

Eliminating Charitable Deduction Would Help Budget, Hurt Charities

Photodisc/Thinkstock(WASHINGTON) -- Looking for a way to put hundreds of billions of dollars back into the federal budget? Eliminating the charitable giving deduction would do just that.

The charitable giving deduction is the piece of tax code that allows Americans who itemize their deductions to subtract donations they give to tax-exempt organizations from their taxable income. For example, if John Doe gave $100 to his church, he could document that donation and subtract it from the income on which he would be expected to pay taxes.

Wealthier Americans get the most out of the charitable tax deduction, because their rate of taxation is higher. So if John Doe's income level puts him in a 35-percent income tax bracket, he would save $35 in taxes from his $100 gift. But if John Doe only pays 15-percent income tax, that same donation would only save him $15.

And John Doe can't deduct anything over 50 percent of his total taxable income.

The deduction is seen as a way to encourage charitable giving. It was first implemented in 1917 when World War I saw the income tax at high levels and policymakers worried that wealthier Americans would not have money left over for charity after taxes, according to the Tax Policy Center.

Almost a century later, doing away with the income tax reprieve given to taxpayers who itemize their gifts to charities, nonprofits, religious organizations and educational groups is an unpopular idea, but it would account for $239 billion between 2013 and 2017, according to the White House budget.

That said, the idea of getting rid of the deduction altogether is one opposed by both the left and the right. Some seek to modify it, while others say any change would be a needless tax increase.

Michael Ettlinger, vice president for economic policy at the liberal think tank Center for American Progress, called tossing out the charitable deduction "a bad idea" that would leave America either more dependent on the government or facing austerity.

"Eliminating it would undermine activities that help low-income people, that pay for the arts, that do a number of other things that are where government is much more heavily involved in other countries," Ettlinger said. "I don't think anyone's pushing hard to get rid of the charitable deduction."

Ettlinger called the fact that Americans in lower tax brackets get less back for their donations "an upside-down subsidy" and said his plan would fix that.

The proposal Ettlinger and others from CAP are putting forward to avoid sailing over the fiscal cliff includes a modification to the charitable giving deduction that would set the amount givers get back at 28 percent.

Instead of deducting the gift from taxable income, "take 28 percent of your charitable contribution and just subtract that from whatever you owe," Ettlinger explained.

Seth Giertz, the University of Nebraska economics professor who co-wrote the Congressional Budget Office's May 2011 analysis of options for the charitable giving deduction, said changing to a percent credit would cost the government less without hurting charities as much as eliminating the deduction altogether.

"It's probably going to hurt not a whole lot," Giertz told ABC News Wednesday. "But it's probably more likely to hurt certain charities that some really high-income people give money to." Universities, for example, might lose out in that scenario.

Giertz said that option might encourage more giving in other areas, however, because taxpayers who chose not to itemize their deductions could still claim the nonrefundable tax credit.

Another option the CBO studied in 2011 involved adding a minimum amount to the size of the gift a taxpayer could claim.

"If we had a floor like a fixed dollar floor … that's probably not going to affect at all the giving from high-income people that give a lot maybe to educational institutions," Giertz explained. "It might affect a little more moderate giving people."

But Giertz said either of these options would have to be part of a larger package of changes to achieve enough savings to bring the country back on good footing.

"Given the fiscal problems we're looking at, you can't just scale back the charitable deduction," Giertz said. "Problems are just too big for that."

And J.D. Foster of the right-leaning Heritage Foundation said taking away any deduction amounts to a tax increase that would not get at the root of the issue.

"In my view, the central fiscal problem we face is the federal government spends far too much, and will soon be spending far more as the entitlement programs balloon," Foster wrote in an email. "Until the President gets serious about this and puts forward substantive ideas on how to reign in federal spending, especially the entitlements, then there is not even a wisp of justification for talking about any tax hikes."

Copyright 2012 ABC News Radio

Tuesday
Sep112012

Can Congress Avoid Fiscal Cliff? Boehner ‘Not Confident At All’

TOBY JORRIN/AFP/Getty Images(WASHINGTON) -- House Speaker John Boehner bluntly assessed the prospects for a bipartisan agreement on deficit reduction and called on President Obama to demonstrate leadership by unveiling his administration’s plan to avoid half a trillion dollars of defense cuts and a wave of expiring tax breaks set to take effect on Jan. 1, 2013.

“I’m not confident at all,” Boehner, R-Ohio, told reporters at a Capitol Hill news conference Tuesday. “Listen, the House has done its job on both the sequester and on the looming tax hikes that’ll cost our economy some 700,000 jobs. The Senate at some point has to act, and on both of these -- where’s the president? Where’s the leadership? Absent without leave.”

At question is a slate of expiring provisions in the federal tax code, in addition to $1.2 trillion in automatic spending cuts set to take effect on Jan. 1. The Budget Control Act, passed by Congress and signed into law by Obama last summer, requires $1.2 trillion in automatic cuts equally divided between defense and domestic programs over the next decade, with the first $109 billion due to take effect Jan. 2, 2013.

Senate Majority Leader Harry Reid reacted to the speaker’s comments, explaining that he is “disappointed” with Boehner’s lack of confidence for a deal for deficit reduction.

“We have to look at the glass being half full, not half empty all the time,” Reid, D-Nev., said following the Democrats’ weekly caucus luncheon. “I’m confident that we will reach some kind of an arrangement … it’s much, much too early to give up.”

Earlier in the day, Boehner touted the fact that the House of Representatives has passed a bill to extend all of the current tax rates and recounted the House’s efforts to replace the defense sequester with alternative spending cuts.

The vast majority of Democrats agree with most Republicans that Congress should work to avoid the effects of the sequester, but assert that the GOP goes about it the wrong way by prioritizing defense spending and protecting tax cuts for the wealthy while undercutting the country’s social safety net and other programs intended to build the middle class.

Democrats contend that the Republicans’ plan would increase the number of children, senior citizens, and others without health insurance and eliminate the Social Services Block grant, which supports programs like Meals on Wheels for 1.7 million seniors and child protective services for at-risk children. Additionally, 326,000 women would not get the breast cancer screenings they are slated to receive in FY 2013 and 284,000 women would not get the cervical cancer screenings they are slated to receive in FY 2013.

Asked to respond to Republican presidential nominee Mitt Romney’s criticism that congressional leaders made a mistake by agreeing to the sequester as part of the Budget Control Act last year, Boehner called the collapse of the grand bargain negotiations with the president “the biggest disappointment of my speakership.”

The speaker admitted the summertime debate was “a difficult time,” but he blamed Obama for devising the sequester “because the president didn’t want to have a second round of a fight over increasing the debt limit.”

“The president didn’t want his reelection inconvenienced by another fight over a $1.2 trillion increase in the debt ceiling, and that’s why we have it,” Boehner recalled. “But having said that, somehow we have to deal with our spending problems. America continues to spend more money than what we bring in, and we have to resolve it.”

The House meets just 11 more days before the election, and many congressional insiders believe a resolution to the standoff will not come until a busy lame duck session of Congress after voters register their input at the polls on Nov. 6.

Reid added his belief that once the election is over, “the Tea Party’s strength will be significantly weakened,” and he predicted there will be more resolve among Republicans to compromise.

Copyright 2012 ABC News Radio

Thursday
May172012

House, Senate Unanimously Reject Obama Budgets -- Or Do They?

Hemera/Thinkstock(WASHINGTON) -- The White House on Wednesday reacted to news that representations of President Obama’s budget had been voted down by the House and Senate by decrying the introduction of the amendments, by Republicans, as “gimmicks.”

“Gimmicks are not solutions,” White House press secretary Jay Carney emailed to ABC News.  “The American people overwhelmingly support a balanced approach to our long-term budget challenges.  That’s the approach the President supports.  The sooner Republicans drop their intransigence and join the American people in supporting a balanced approach, the sooner Congress will be able to come together and reach a compromise.”

Sen. Jeff Sessions, R-Miss., introduced a budget amendment representing the president’s budget request; the Sessions amendment was voted down 99-0.

A similar effort from Rep. Mick Mulvaney, R-SC, was rejected in the House 414-0.

Sessions told reporters that it was “stunning” that no one voted for the version of the Obama budget he put forward.

“A sitting president of the United States, seeking reelection, can’t lay out a plan that will gain a single vote in the House or Senate for the financial future of America,” he said.  “It speaks volumes

While the Sessions and Mulvaney bills put forward the same topline numbers as those in the president’s budget, neither offered any specifics.  The Sessions legislation was 56 pages long; actual budgets are closer to 2,000 pages long.

Thus, a White House official said, the Sessions proposal was a “shell that could be filled with a number of things that could hurt our economy and hurt the middle class.  For example, rather than ending tax breaks for millionaires his budget could hit the revenue target by raising taxes on the middle class and rather than ending wasteful programs, his budget could hit its spending target with severe cuts to important programs.”

“This is the president’s budget,” said the top Democrat on the Senate Budget Committee, Sen. Kent Conrad of South Dakota, indicating the voluminous budget proposal Obama offered.  “This is what Sen. Sessions has presented as being the president’s budget,” he said,  indicating the much slimmer document.

“I think it’s readily apparent there is a big difference between the president’s budget, which I hold in my hands, and what Sen. Sessions has presented as being the president’s budget.  This is not the president’s budget.  So, of course, we’re not going to support it.  It’s not what the president proposed,” Conrad continued.

The White House official said the Sessions and Mulvaney’s bills were mere GOP stunts to get Democrats on record opposing "the president’s budget” as well as distracting from what the House Republican budget would do, which the official described as “protect(ing) massive tax cuts for millionaires and billionaires while making the middle class and seniors pay.”

Copyright 2012 ABC News Radio

Tuesday
Apr032012

Obama Blasts ‘Radical’ GOP Budget as ‘Prescription for Decline’

Alex Wong/Getty Images(WASHINGTON) -- President Obama on Tuesday will accuse his Republican rivals of supporting a budget that is nothing more than a “Trojan Horse,” as he continues to cast himself as a defender of the middle class.

“Disguised as [a] deficit-reduction plan, it’s really an attempt to impose a radical vision on our country.  It’s nothing but thinly veiled Social Darwinism,” Obama will say at the Associated Press luncheon on Tuesday, according to prepared remarks.

The president will harshly criticize the $3.5 trillion budget proposed by Rep. Paul Ryan, R-Wis., which has been supported by the Republican presidential candidates.  The plan has come under attack from Democrats who claim it supports the interests of the super-wealthy and would gut Medicare.

“It’s antithetical to our entire history as a land of opportunity and upward mobility for everyone who’s willing to work for it -- a place where prosperity doesn’t trickle down from the top, but grows outward from the heart of the middle class,” Obama will say.  “By gutting the very things we need to grow an economy that’s built to last -- education and training, research and development -- it’s a prescription for decline.”

The president is expected to argue that the nation is at a make-or-break moment for the middle class and to continue to push his proposed Buffett Rule, which would require people earning $1 million a year to pay at least the same tax rate as middle-class families.

Copyright 2012 ABC News Radio

Friday
Mar232012

Biden to Thrust Medicare into Election Spotlight

Joe Raedle/Getty Images(WASHINGTON) -- Vice President Joe Biden will elevate Medicare as a central issue in the 2012 campaign Friday with a speech accusing the Republican presidential candidates of wanting to “dismantle” it.

“Make no mistake,” Biden will tell an audience of retirees at an event in Coconut Creek, Fla., “If Republicans in Congress and their amen corner of [Mitt] Romney, [Rick] Santorum, and [Newt] Gingrich get their hands on the White House, they will end Medicare as we know it.”

The remarks, advance excerpts of which were provided by the Obama campaign, portray Republicans as willing to extend tax breaks to the wealthy at the expense of benefits for seniors and the needy.

House Republicans earlier this week unveiled their latest budget blueprint, drafted by budget committee chairman Rep. Paul Ryan, which includes deep spending cuts, controversial changes to Medicare and cuts in income tax rates.  Ryan has said the GOP presidential nominees are all supportive of his plan.
 
“So, let’s cut through it and say it in plain English,” Biden will say of the Republican proposal to “cut, cap and balance” the federal budget.

“The ‘cut’ is cutting Social Security.  The ‘cap’ is putting a cap on what we ask the wealthiest Americans to pay in taxes.  And the ‘balance’ is balancing the budget on the backs of seniors and middle class Americans,” he will say.

Ryan said this week that, contrary to Democrats’ doomsday portrayals, the budget proposal will appeal to voters in the fall because of its bold attempt to reduce the national debt.

“The President and his party are ignoring this problem,” Ryan added.  “And if we have a debt crisis, the people that get hurt the first and the worst are the poor and the elderly.  We will be cutting indiscriminately just like they are doing in Greece.  We have a moral and legal obligation to budget, to show how we will prevent this crisis -- this most predictable crisis -- from coming.  And so yes, I expect our nominee, whoever he is, to talk about how he proposes to fix this problem.”

Biden's campaign speech is the second of four planned to frame the 2012 election as a series of stark choices on key issues, rather than a referendum on the Obama administration’s record.  Last week, he spoke to autoworkers in Toledo, Ohio about Obama’s support for the 2009 industry bailout and the manufacturing sector.

Copyright 2012 ABC News Radio

Friday
Sep302011

Senators Cry Foul over Plan to Trim Watchdog Agency

U.S. Sen. Tom Coburn, R-Okla. (Chip Somodevilla/Getty Images)(WASHINGTON) -- A group of the most fervent budget hawks in Congress have found at least one spending cut that they don’t like: proposed cuts the Government Accountability Office’s budget.

Claiming that the proposed 7 percent cut will be “overly burdensome” to the government watchdog agency, five senators, including four Republicans and one Democrat, sent a letter to the appropriators Thursday in protest.

“We are, however, concerned that the Government Accountability Office (GAO) is being unfairly singled out with both excessively deep cuts and overly burdensome new mandates that will consume the agency’s more limited resources for no apparent benefit,” they wrote.

The letter is signed by Senators Tom Coburn, R-Okla.; John McCain, R-Ariz.; Scott Brown, R-Mass.; Ron Johnson, R-Wisc.; and Claire McCaskill, D-Mo.

This month, the Senate Appropriations Committee approved Chairman Ben Nelson’s, D-Neb., plan -- within the fiscal year 2012 Legislative Branch appropriations bill -- to cut Congress’ spending by 5.2 percent, amounting to a $200 million saving.

“These cuts are strategic and sensible.  But make no mistake, they are real and will force Congress and the agencies on Capitol Hill to live with less,” Nelson said of the proposed cuts earlier this month.  “As Congress works to bring down federal spending, bring down the debt and balance the federal budget, Congress must tighten its own belt.”

The proposal calls for a 7.6 percent cut to the GAO, the independent, nonpartisan agency that served as a Congressional watchdog investigating how the federal government spends taxpayer’s money.

“While we agree GAO must face the same harsh fiscal realities being applied to every other federal agency and program, the cut to the agency’s budget represents more than 10 percent of the entire reduction proposed within legislative branch spending,” the bipartisan group of Senators wrote in the letter to Chairman Nelson and Ranking Member Hoeven on the Senate Appropriations Committee.  “There is no question oversight of the federal government, a primary function of the legislative branch, will suffer as a result of this dramatic cut to GAO funding.”

In an op-ed in The Washington Examiner Thursday morning, Sen. Coburn dubs this the “Senate appropriators’ secret war against oversight.”

“The logic of the committee’s proposal is tough to decipher,” Coburn wrote.  “At a time when we are running a $15 trillion debt and are borrowing $4.5 billion a day to keep government open and our military deployed, every agency needs to tighten its belt.  Yet, the Appropriations Committee proposal looks like mismanagement at best and pay back at worse.”

Copyright 2011 ABC News Radio

Tuesday
Aug232011

GOP Leader Accuses Obama of Fostering Class Warfare

Win McNamee/Getty Images(WASHINGTON) -- Congress may be in recess but that doesn't mean Republicans aren't hearing President Obama accuse them of putting "party ahead of country."

With Obama planning to outline his proposals for creating jobs after Labor Day, GOP lawmakers are gearing up for more battles with the White House on how to best improve the sputtering economy.

Meanwhile, House Majority Leader Eric Cantor is firing back at the president for suggesting Republicans are trying to sabotage his attempts at putting Americans back to work in order to appeal to the far right and Tea Party.

In an op-ed appearing in The Washington Post, Cantor says that Obama's demand to end Bush-era tax cuts is "fueled by efforts to incite class warfare" because he wants tax breaks ended for individuals earning $200,000 or more and small businesses that make over $250,000.

The Virginia Congressman alleges the president is trying to make a clear divide between the financially well-off and the rest of America in an effort to "permanently increase the size of government."

Cantor goes on to say that Obama is the real hindrance to lowering the deficit and balancing the budget, calling him inflexible and an obstructionist.

The House Majority Whip contends that although the president is aware of the pending insolvency of Social Security, Medicare and Medicaid, he won't touch these entitlement programs even if Republicans agree to raise revenues by increasing taxes.

According to Cantor, "We have found President Obama to be an unwilling partner when it comes to getting America’s fiscal house in order."

Copyright 2011 ABC News Radio

Wednesday
Jul202011

Poll: Dissatisfaction with Washington Hits 19-Year High

Jupiterimages/Thinkstock(NEW YORK) -- Discontent with Washington’s budget battles has spurred public dissatisfaction with the federal government to its highest level in nearly 20 years, with attendant political peril on both sides of the debate.

Against a backdrop of broad concern about the impact of default, 80 percent of Americans in a new ABC News/Washington Post poll say they’re "dissatisfied" or even "angry" with the way the federal government is working, up 11 points in a single month.  It last was this high in 1992, during the economic downturn that cost the first President Bush a second term.

The times today are nearly as tough: The ABC News Frustration Index has risen to 72 on its scale of 0 to 100, its highest since just before the 2010 midterm elections and well into the political danger zone.  The index combines dissatisfaction with the government, anti-incumbent sentiment and ratings of the president and the economy alike.

But unlike 1992 or 2010, the opposition party’s taking even more heat than the president.  While President Obama for the first time has fallen under 40 percent approval for handling the economy, the Republicans in Congress do even worse, with 28 percent approval.  On handling the deficit, it’s a weak 38 percent approval for Obama, but a weaker 27 percent for the GOP.  And on handling taxes, Obama has 45 percent approval, the GOP has 31 percent.

Obama maintains 47 percent job approval overall in this poll, produced for ABC News by Langer Research Associates.  That’s better than it might be, given the economy and the public’s palpable annoyance with Washington.  And in the budget debate he has some comparative advantages: head-to-head, he leads the congressional Republicans in trust to handle the debt debate, 48 percent to 39 percent.  And while 58 percent say he hasn’t done enough to compromise on the deficit, many more -- 77 percent -- say the same about the GOP leaders.

Those views of intransigence are up by six points for both sides, indicating increased frustration with the budget wrangles.  That includes each side’s own faithful: forty-three percent of liberals say Obama is not willing enough to compromise on the deficit, up 13 points from this spring.

But more conservatives and Republicans, 58 percent in both cases, say GOP leaders aren’t doing enough to compromise; the latter is up by 16 points.  Even among Tea Party supporters, 62 percent say Congressional Republicans have not been willing enough to compromise on the deficit.

Copyright 2011 ABC News Radio

Thursday
Jun302011

Bill Clinton Exclusive: 'Not the Time for Spending Cuts'

ABC News(CHICAGO) -- Former President Bill Clinton sees a possible way past the bipartisan impasse over raising the debt limit: agree to cut spending and raise taxes, but do neither until later, after the economy improves.

"If they [the Republicans] said, look, that now is not the time for big tax increases to harm the recovery, they would be right," Clinton told ABC News in an exclusive interview at the Clinton Global Initiative America conference in Chicago.  "But it's also right to say that now's not the time for big spending cuts."

"What I'd like to see them do is agree on the outlines of a 10-year plan and agree not to start either the revenue hikes or the spending cuts until we've got this recovery underway," Clinton added.  "The confidence that the Republicans say would be given to investors with a budget plan, they'd get whether we started this year or next year or the year after that, for that matter."

For the first time, the former president is focusing his Clinton Global Initiative on creating jobs here in the United States.  He suggested waiting for the recovery to take hold before pushing spending cuts and tax increases will make the issues clearer.

"We've got to get the jobs back in this economy again," Clinton said.  "The more people we get going back to work, the more businesses we start, that'll bring up the revenue flow, and it will cut down on the expenses.  Then, we'll see what the real dimensions of our problem are."

Unfortunately, however, Clinton fears Republicans' "ideological conviction" about never raising taxes recalls the lead-up to government shutdowns in the '90s, adding that the pressure on GOP candidates to toe the ideological line could hamstring their bids to unseat President Obama.

"They were in a similar anti-government fever, anti-tax fever in 1995 until, you know, the struggle went on for a year and they shut the government down twice," Clinton said.  "The public made a judgment that that was not right.  And then we finally broke through.  It wound up with the balanced budget act and forced surpluses and real prosperity."

Could the dispute this time push past the Aug. 2 deadline when, officials say, failing to raise the nation's debt ceiling could lead to America defaulting on its loans?  Clinton didn't discount the possibility.

"When I passed my budget in 1993, they routinely said it would bring on a terrible recession, [that] it was the end of capitalism as we knew it," he said.  "And we had the best eight years in our history.  But they just kept saying it.  You've got to give them credit.  The evidence doesn't deter them...It's an ideological conviction.  So, I don't know that it can be resolved until there's some break in the action."

Copyright 2011 ABC News Radio







ABC News Radio