Nel's New Day

February 2, 2015

President Releases Budget, Opposes GOP in Mandatory Vaccinations

Have you heard all that squealing coming out of Washington, D.C. today? It’s not Sen. Joni Ernst (R-IA) castrating pigs with the new tool that Sen. Lindsey Graham (R-SC) gave her. No, it’s the release of President Obama’s 2016 budget, the book of how to get money and where to spend it.

In brief, he wants more spending, tax breaks for the middle class and poor workers, and higher taxes on the wealthy and large banks. The entire process is symbolic because Congress passes the budget, and this year’s Congress is GOP-controlled. Therefore, Congress will largely ignore anything that the president recommends. The budget, however, is a distinct document about the values of political parties and individuals, and the president has set up the debate for these issues.

  • Expand the child care tax credit by up to $3,000 per child;
  • Establish a $2.2 billion grant program to encourage states to create paid sick and family leave programs;
  • Begin a four-year program to improve roads, bridges and railways nationwide;
  • Help pay for preschool for 4-year-olds from poor and middle-income families;
  • Expand and extend tax credits for parents paying for child care, college students paying tuition, and low-wage childless workers;
  • Increase the Pentagon’s budget by $38 billion;
  • The president’s budget wishlist:
  • Increase the pay of military and federal employees by 1.3 percent;
  • Extend unemployment insurance;
  • Provide $215 million for research known as “precision medicine,” which involves using patients’ genetic information to tailor medications specifically to their bodies;
  • Set up a dedicated fund for fighting wildfires.

Declining debt: Sen. Orrin Hatch (R-UT) accuses the president of being “fiscally irresponsible,” but according to the White House, the budget will begin to pay down the national debt while not increasing the debt. Officials say that the plan gives a $474 billion deficit, 2.5 percent of the GDP, down from $583 billion and matching the deficits of the past 50 years. The recent increase in the deficit came from tax funding because of decreased income. With cuts in federal spending and increased taxes, the deficit has declined. A growth in economy during the next decade with the president’s proposals will cause the debt to decline to represent 73.3 percent of GDP in ten years, down from the current 75 percent.

Funding sources: The president has always wanted limits on tax breaks that help the top two percent of the wealthy to keep the deficit in line. This proposal reduces the deficit by $1.8 trillion through spending cuts and tax increases, possibly one on tobacco to pay for early childhood education.

Other possible proposals:

  • Raising the capital gains tax, paid by investors when they sell at a profit.
  • Imposing a new tax on inheritances.
  • Cutting corporate tax rate to 28 percent while taxing overseas profits at 14 percent when companies bring them back to the United States.
  • Levying a tax on large banks to compensate for the advantage they gain in the market from being seen as “too big to fail.”

Affect of new taxes: Families with children would benefit from the credit for child care, but the increase in the capital gains tax and the tax on banks could mean higher prices or lower wages.

GOP response: House Ways and Means Committee Chairman Paul Ryan (R-WI) said that his party will not separate corporate tax reform from an overhaul of the individual tax code. They want to raise funding for the military but no one else.

The next step: The GOP will have to put together its own budget, hoping to keep both voters and the wealthy contributors to their campaigns happy. Right now, they’re worried about passing a bill that funds Homeland Security before February 28 of this year.

The budget fails to follow the sequestration that imposed automatic spending cuts, but the austerity of the past several years may be loosened because the GOP are going to want some of the same things that the president does. For example, the highway trust fund is empty by June: people in both parties understand that the U.S. infrastructure is rapidly crumbling, making this area a priority.

President Obama’s budget plan would end the strict spending caps on domestic and defense programs by raising military spending by $38 billion over the capped level and nondefense spending by $37 billion. Social Security spending would rise from $891 billion this year to $1.6 trillion in 2025, and Medicare would climb from $529 billion to over $1 trillion. These programs would increase from 13.2 percent of the economy this year to 14.8 percent in a decade, while domestic and defense programs under Congress’s discretion would shrink to 4.5 percent of the economy in 2025, from the current 6.4 percent. Tax increases on the wealthy, big banks, and fees of hedge fund and private equity managers would raise almost $1 trillion in the same time. If the House passed the former Senate bill on immigration, the deficit could shrink by $158 billion.

The GOP may not want to give a one-time corporate tax rate on overseas profits brought back into the country to be used for infrastructure construction, but it’s an idea put forward by Sen. Rand Paul (R-KY) who also wants to be president. Tech giants like Apple, Google, and Microsoft are some of the corporations that keep most of their cash abroad to avoid paying U.S. taxes. After the initial 14 percent tax to bring the money home, companies would have to pay at least 19 percent on future offshore earnings with no loopholes or opportunities for deferral. Companies have at least $2 trillion overseas.

The president’s goal for transportation and infrastructure of $478 billion is more than one-third above the current spending rate and a 75 percent increase for mass transit. Half of that money would come from the current taxes on gasoline and other fuels. Another $238 billion would come from the one-time surge of taxes as corporations are forced to pay 14 percent on profits now parked abroad.

The proposal of a major expansion of the earned income credit for low-income workers without children is also backed by Ryan.

The talk about vaccinations overshadowed the discussion of the president’s budget on the media today. President Obama came out yesterday and said that he thought that vaccinations were vital. With an outbreak currently at 102 cases in 14 states possibly because children were infected at Disneyland, the spread across the nation is becoming more dangerous. The 644 cases last year in the U.S. was the most since the early 1990s. About two of every 1,000 people with measles will die; others suffer hearing loss, pneumonia, and brain swelling.

Two potential presidential candidates said today that vaccinations should be optional rather than mandated. Trying to look presidential while touring a vaccine laboratory in Cambridge, England, New Jersey Gov. Chris Christie, who forcibly isolated healthy Kaci Hickox because of her proximity to Ebola victims, asked for “some measure of choice” regarding vaccinations against measles and other diseases in children. He was followed by Sen. Rand Paul (R-KY) who said that move vaccines should be voluntary because children end up “with profound mental disorders after vaccines.” Paul added, “The state doesn’t own your children.”

Public outcry caused Christie to back-pedal; an aide said that he believes vaccines are “an important public health protection.” On the other hand, Paul doubled down on his claim that vaccinations should all be “voluntary.” He has an anti-vaccine history with his past membership in Association of American Physicians and Surgeons, a group of pro-life doctors who believe that abortion increases the chance of breast cancer in women, consider Medicare to be “evil” and “immoral,” question the link between HIV and AIDS, and protest vaccinations for health workers.

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2 Comments »

  1. Thanks again for making this budget clear for me. You do a lot of work on our behalf. Jeanette

    Like

    Comment by Jeanette Daane — February 3, 2015 @ 9:37 AM | Reply

  2. What a depressing Monday.

    Like

    Comment by Lee Lynch — February 2, 2015 @ 8:56 PM | Reply


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