NETWORK Analysis of President Obama’s New Budget Proposal
February 5, 2015
NETWORK strongly believes the federal budget is a moral statement of the priorities of our nation. We analyze budget proposals according to social justice teachings of our faith and call on elected leaders to write and approve budgets that serve all segments of society, particularly those struggling to overcome poverty, with an eye to future generations. The federal budget should aim to build a strong domestic economy and thriving communities for the 100%.
At a time of historic levels of inequality, when a small percentage of families in the U.S. have done incredibly well while so many have struggled with flat wages and are barely getting by, it is imperative that economic policies be enacted to reverse this dangerous and destabilizing trend.
To that end, we applaud the Obama administration’s budget proposal as a valuable first step toward meeting our nation’s obligation to invest in working families while asking those who have benefited most from our economy – often through low taxes on capital gains and tax loopholes – to pay their fair share. The budget is fiscally responsible because it funds important programs that support families and individuals working to become part of the U.S. middle class.
Our economy is strengthened when workers receive wages sufficient to support their families. They need well-paying jobs along with education and training for those jobs.
A well-trained workforce begins in childhood and continues through appropriate preparation for the changing workplace. President Obama’s budget includes increased investment in early childhood education, supports for K-12 students with special needs, and well-trained teachers, particularly in subjects such as science, math and technology. It will also expand Head Start and Early Head Start to more children and for longer duration.
The budget will encourage workers to upgrade their skills as work environments change, offer two years of community college at no cost to responsible students, enact tax reforms to make additional college more affordable, and ensure that Pell Grants keep pace with inflation. Further, it will double registered apprenticeships and fund training in best business practices for entrepreneurs. With these policies, our nation invests in its most valuable resource – people.
In order for parents to hold jobs, they need access to work supports such as safe and affordable child care and the security of paid leave when they or family members are sick. The president’s budget increases availability of child care and provides a tax credit for low- and middle-income families paying for child or dependent care. Middle-class tax credits encouraging work include a “second earner” tax credit, a permanent improved Child Tax Credit, and an expanded Earned Income Tax Credit that helps non-custodial parents and individuals without children. Additionally, State Paid Leave Initiatives are further encouraged through funding for initial set-up to some states.
Expanding the National Network of Manufacturing Institutes, launching the American Made Scale-Up Fund (a public-private investment fund for start-ups), establishing an independent National Infrastructure Bank, and issuing more timely decisions on infrastructure permits will increase the availability of well-paying jobs in the United States. The 2016 budget proposal also provides a 6% increase in research and development investment, particularly in health-related areas. Investment in the Infrastructure Bank will provide well-paying jobs while repairing roads, bridges and public buildings that have languished for over 30 years. Those who make the greatest use of, and profit from, our infrastructure would be asked to take greater responsibility for its upkeep.
Workers and non-workers alike can only be secure when they have an assurance of available and affordable healthcare. The 2016 budget request strengthens the impact of the Affordable Care Act and Medicaid expansion.
Children are insecure when they are not in stable housing and school settings. Teachers in low-income schools report that up to 90% of students move and/or change schools within the year. At the end of the year, many of these students have lost rather than gained skills. The president’s budget request improves coordination of resources that enhance community stability and growth by supplementing HUD and Department of Education funding for additional “Promise Zones.”
Some security is also provided by law-enforcement and the military. The president’s budget will increase Homeland Security and Pentagon funding, commensurate with non-defense economic security. The Pentagon base budget would be increased, while the less monitored Overseas Contingency Operations (OCO) fund will be reduced to covering truly extraordinary costs of overseas engagement.
The president’s budget will increase both non-defense and defense spending, but in deliberate and measured ways. It would eliminate the mindless approach called Sequestration – across-the-board cuts that pay no attention to damage caused by cutting individual programs. The House and Senate, on both sides of the aisle, agree that Sequestration is no way to make responsible budgetary decisions about how to enact reasonable cuts and raise sufficient revenue to meet the needs of the 100%.
Overall, we continue to be concerned about the increased Pentagon spending, preferring additional funding for human needs, both foreign and domestic. We know that real security comes when neighbors have their needs met and families have hope for a future. More Pentagon spending is not an effective way forward for our nation and our world.
Sequestration budget cuts have significantly harmed a large numbers of families. Between 2013 and 2015, 57,000 children were unable to be enrolled in Head Start, 100,000 fewer low-income households received rental housing vouchers, and hundreds of thousands of meals were not distributed by Meals-on-Wheels.
Between 2010 and 2015, 136 human-needs programs received cuts. Of these, 51 were cut by at least 15% and 40 by at least one-third. The estimated loss across all human-needs programs from 2010 through 2015 is 16%. These include programs for the elderly and children, education, youth services, home energy assistance, housing, public health, and job training. The budget proposed by the president will go far, but not far enough, in reversing the most critical cuts of the past five years. The damage will increase dramatically if Sequestration is the choice of Congress for 2016.
In reviewing tax proposals, NETWORK applauds the administration’s effort to fund increased investment through reasonable, fair tax increases for wealthy individuals and for corporations that avoid taxation through tax havens overseas. Loopholes supporting tax avoidance by wealthy corporations and individuals are unjust and drain the government of productive revenue. Revenues raised through our tax system should be enough to pay for the public needs of society and set us on a sustainable path to economic growth and stability. These proposals require corporations and wealthy individuals to pay their fair share of taxes.
The administration has chosen to limit tax expenditures to those that promote the common good and create a more equitable, secure society by expanding tax credits. Proposals to help working families, like a permanent and expanded Earned Income Tax Credit (EITC) and a permanent, refundable Child Tax Credit, are crucially important and benefit 16 million families, including 29 million children each year. These proposals have longstanding bipartisan support and strengthen our society from the ground up.
Sister Simone Campbell, NETWORK’s executive director, has called on our elected leaders to make responsible budget decisions that benefit everyone, not just those who are rich and powerful: “Congress should reject partisan sound bites and get to work for our entire nation. We need to raise reasonable revenue for responsible programs that benefit the 100%. The president’s budget is an important step toward creating an economy of inclusion.”