Obama budget plan would boost U.S. tax revenue, cut deficits

Obama budget plan would boost U.S. tax revenue, cut deficits

BUDGET:Obama's budget plan is loaded with new policy changes, including an assumption that sweeping immigration reforms are enacted, producing a net 10-year deficit reduction of $158 billion. Photo: Reuters

WASHINGTON (Reuters) – President Barack Obama’s fiscal 2015 budget request would boost U.S. tax revenues by nearly $1.4 trillion over 10 years if fully enacted, slashing deficits by $1.05 trillion while funding new spending, the Congressional Budget Office said on Thursday.

There is virtually no chance that Congress will advance Obama’s plan in its entirety. But the CBO’s latest analysis will feed campaign messaging by both Democrats and Republicans ahead of congressional elections in November.

The analysis compares Obama’s request to a new “baseline” estimate that CBO released last week that assumes no changes to current tax and spending laws.

But Obama’s budget plan is loaded with new policy changes, including an assumption that sweeping immigration reforms are enacted, producing a net 10-year deficit reduction of $158 billion.

It proposes to boost revenues by limiting tax breaks for wealthy Americans and businesses, imposing a new tax on millionaires, raising tobacco taxes, and restoring estate and gift taxes to their previously higher, 2009 levels.

At the same time, it would boost spending by expanding cash tax credits for low-income Americans, canceling the “sequester” automatic spending cuts to military and domestic programs, and increasing funds for job training programs, among other changes.

Republicans, who last week in the House of Representatives passed an austere, 10-year balanced budget plan with deep domestic spending cuts and no tax increases, will focus their criticism on tax hikes in Obama’s plan. Democrats, who are basing their re-election campaigns on efforts to reduce the gap between rich and poor, are expected to highlight Obama’s proposals to aid the middle class and the poor.

The CBO analysis shows that Obama’s budget plan would increase deficits slightly relative to current law in fiscal 2014 and 2015, with deficits just above $500 billion in both years.

Deficits in later years of the 10-year budget window would begin to rise again in both Obama’s plan and the current-law CBO estimate as more of the Baby Boom generation retires and draws federal benefits. But deficits under Obama’s plan in those years would be lower than the CBO baseline as the new revenue measures gain steam.

(Reporting by David Lawder; Editing by Eric Beech)

Recent Headlines

in Local Sports

A’s edge M’s in 13 innings

Marcus Semien

Marcus Semien hit a two-run homer in the 13th inning to lift the Oakland Athletics to a 7-5 victory over the Seattle Mariners on Saturday night.

in Local Sports

Blazers blank Ravens in home opener

bellingham blazers logo

With the win, Bellingham improves to 2-2 on the season.

in Sports

No. 25 Florida routs No. 3 Ole Miss & AP Top 25 scoreboard


All the scores from across the AP Top 25.

in Sports

Max Scherzer K’s 17 in second no-hitter this season

Max Scherzer

Only one batter reached base against Scherzer, and that came when third baseman Yunel Escobar bounced a throw for an error on Kevin Plawecki's leadoff grounder in the sixth inning.

in Sports

Early wake-up call Sunday for Dolphins, Jets in London

Miami Dolphins players and cheerleaders pose for a group picture with London schoolchildren during a training session Allianz Park in London, Friday Oct. 2, 2015. The Dolphins are preparing for an NFL football game against the New York Jets at London's Wembley stadium on Sunday. (AP Photo/Tim Ireland)

The alarm will sound early Sunday for the Dolphins, and not just because they kick off against the New York Jets in London at 2:30 p.m. local time, which is 9:30 a.m. in Miami and New York.