Tuesday, February 3, 2015

President's Budget Proposal & the Need(?) for a Balanced Budget

Given the topic for this week's blog post, it's quite timely that President Obama just released his budget proposal for FY 2016. Some of the major highlights of the $3.99 trillion plan include the following:
  • An increase in defense spending
  • Increases in the capital gains tax rate
  • New taxes on large banks and on personal inheritance taxes
  • Tax credits for parents paying for child care
  • Increased funding for universal pre-K programs
  • Increased investment in medical research
  • A four-year infrastructure plan paid for partially by taxes on overseas profits
If enacted, the President's proposal would result in an estimated deficit of $474 billion for FY 2016. While this would be the smallest deficit since 2008, the figure was an immediate lightning rod for criticism from the Republican-controlled Congress, which is unlikely to support most of the President's plan. Areas for possible compromise include defense and transportation spending, and some moderate tax reforms.

Here are some interesting graphics from the Washington Post, New York Times, and Wall Street Journal that illustrate the President's proposal.

I predict that there will again be some much-publicized discussion in the coming weeks about whether the federal government should be required to have a balanced budget. I encourage you to read some of the many contrasting views on this issue, and to share your thoughts below.

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