Congress plans to hold dozens of hearings this week on President Obama’s proposed budget for Fiscal 2014. Ideally, his proposals will be considered through a House-Senate conference committee as it works on a joint budget resolution.
“While elected officials have made some progress on deficit reduction in the last two years, much remains to be done to rein in the federal debt and ensure that the country is on a sustainable long-term path,” Robert L. Bixby, Concord’s executive director, said. “The President deserves credit for political courage in proposing meaningful savings from entitlement programs, including Medicare, and new revenues from curbing government subsidies in the tax code.”
Although many elected officials have expressed interest in such reforms, the President’s budget was met with immediate criticism from both the right and the left and set off internal debates in both parties. This reflects his proposed budget’s strength, however; it is forcing people across the political spectrum to confront the difficult choices and trade-offs that must be faced.
One of the most glaring problems with the tax code, for example, is that it contains so many special provisions that drain revenue and function largely like spending programs. As shown in a new Concord infographic, last year these “tax expenditures” totaled $1.175 trillion – slightly more than all the money the government collected in individual income taxes.
Obama’s budget suggests limiting itemized deductions for those in higher tax brackets while eliminating certain specific tax breaks.
“Hopefully, the President’s proposals will shift the discussion towards greater specificity, with elected officials spelling out exactly which tax breaks they intend to abolish — something they failed to do in both the House and Senate budgets,” said Joshua Gordon, Concord’s policy director.
The President’s budget also reiterates his last offer to Republican leaders in the “fiscal cliff” negotiations late last year, something that Bixby says “keeps alive the possibility of a bargain, grand or otherwise, that eluded the so-called ‘Super Committee’ and led to the arbitrary across-the-board sequestration that has now gone into effect.”
Bixby, however, cautioned against some new initiatives in the President’s budget, even if they are theoretically paid for: “We should not add new budgetary commitments until we’ve figured out how to make our commitments sustainable.”
External links:
The President’s Budget for Fiscal 2014
