Pres. Obama's New Budget Says A Lot About His Remaining Priorities

February 3rd 2015

Mike Vainisi

President Obama will unveil his 2016 budget proposal today.

It's just a proposal -- these types of plans must be first passed by Congress -- but it provides a view into what the president will be prioritizing in his negotiations with the Republican-controlled Congress.

The White House says this proposal would result in a deficit of $474 billion or 2.5 percent of gross domestic product, which is approximately in line with deficits over the last half-century.

Soon, we'll see the Republicans in Congress release their own budget. It might include some of the tax breaks you see below -- but it will surely not include any of the tax increases on the wealthy and on corporations. It will also not include many (if not all) of the new programs proposed, such as free community college, free pre-school, and paid leave.

60 Minutes Infrastructure

Fixing roads and bridges...with taxes on corporations.

The budget includes $478 billion of investment in roads, bridges, and transit systems as part of a six-year plan to update America's aging infrastructure. 

To pay for it, the president proposes a tax on $2 trillion in US corporate profits that are sitting overseas. That would mean both a one-time, 14-percent tax on existing profits as well as a new, 19-percent minimum tax moving forward on global profits. The new tax would close a loophole that allows corporations to avoid the taxes by stashing those existing profits in foreign countries.

But there are some goodies for corporations: the president seeks to lower the corporate rate on domestic profits from 35 percent to 28 percent.

(For more, check out this video about the importance of updating America's crumbling roads and bridges.)

College Students In Class

Free community college...with a slight tweak.

As promised, the president has proposed making community college free. He's added another requirement to this benefit, however, in addition to the 2.5 GPA and minimum credit requirements. To qualify for free community college, students cannot have a family income of $200,000 or over. The president is asking for $60 billion to fund the program over its first 10 years.

(For more on the president's community college plan, check out this explainer.)

There are some other education proposals in the budget: more discretionary education funding, free pre-school, grants to help states improve teaching quality, an expansion of pay-as-you-earn student loan payment options, and other student loan tax reforms.

luxury tax

Tax credits for the middle class...tax increases on the wealthy.

The president's budget includes a tax cut for families that could amount to as much as $3,000 per child. The maximum tax cut would be available to households making under $120,000 in yearly income. He's also asked for an extra $500 "second earner" credit to couples with both partners working.

On the other hand, the capital gains tax -- which taxes returns on the sale of assets such as stocks or bonds -- would increase to 28 percent for high-earning households. The president also proposes ending tax benefits for people inheriting large sums of money or stock.

Finally, the budget includes a proposal to levy a tax on large banks.

Here's more detail on the president's tax plan. (There's also a Democratic tax plan in Congress -- we summarized it here.)

Social Security benefits for same-sex couples.

The new budget proposes that same-sex couples receive Social Security benefits, regardless of whether they live in a state without legalized same-sex marriage. Under the current system, a married, same-sex couple loses their benefits if they move to a state without same-sex marriage.

Health care for kids...paid with tobacco taxes.

The president would raise cigarette taxes from about $1.01 per pack to about $1.95 per pack. This revenue -- in addition to some other tax increases on tobacco products -- would go towards providing health insurance to low-income children.

Police body cameras

Another interesting item is a $30 million fund for states to purchase police body cameras, which some activists think would increase police accountability and decrease instances of police brutality. Body cameras have been a policy goal of protestors who gathered in response to the deaths of Mike Brown and Eric Garner.

(Click here for more detail on body cameras and police accountability.)

Medical research

The president thinks we should invest $215 million into "precision medicine," which refers to specific treatment methods tailored to a patient's genetic code.

Paid Leave

The budget would offer states help in launching mandatory family leave programs. 

Currently, certain workers in the private sector are guaranteed 12 weeks of unpaid sick leave and unpaid family leave, which includes leave to care for new babies as well as leave to care for a sick family member. But that only covers full-time workers at companies with at least 50 employees. Plus, it's unpaid. The president is hoping Congress will go along with him in enticing states to extend mandatory paid leave to more full-time workers.


The president proposes that we spend more on space travel --- he wants NASA's budget increased by $500 million to $18.5 billion.


Our defense budget would increase by $38 billion under the president's budget. 

In addition to increasing funding for action against ISIS as well as helping NATO allies in Europe deal with Russia, the president's budget includes $14 billion to strengthen US cybersecurity.

For our veterans, the president calls on Congress to commit $60 billion to improving veterans' medical care. This comes in the wake of last year's revelation that the Veterans Affairs Department had mishandled thousands of veterans' medical cases.