President Barack Obama Tuesday proposed a $3.9 trillion budget for the federal spending year that starts in October, urging Congress to approve a major expansion of a program that provides a substantial federal tax credit for low-income Americans who have jobs.
In a budget that quickly encountered criticism from congressional Republicans, Obama wants to spend $60 billion during the next decade to expand the Earned Income Tax Credit, known as the EITC and which provides hundreds of additional dollars every year to working families.
In a proposal that could impact the National Aviation Heritage area in Dayton, the budget cuts spending for so-called heritage areas — from $18 million to $9 million. The administration attempted to cut the same program last year, but Congress restored the money.
In addition, the budget includes $35 million to help renovate a federal building in downtown Cincinnati that houses the Internal Revenue Service. It boosts spending for the U.S. Department of Veterans Affairs by 3 percent. That finances the Dayton VA facility.
The White House budget also includes $160 million for continued clean-up of the former nuclear site at the Portsmouth Gaseous Diffusion Plant in southeast Ohio. In addition, the budget includes $104 million for both Portsmouth and a similar plant in Kentucky to help re-use depleted uranium waste at the two facilities.
The clean-up money is separate from $118 billion approved by Congress in January for a Maryland company that wants to launch a uranium enrichment facility at the Portsmouth facility, which is near Piketon, Ohio.
The budget cuts $430 million from the Clean Water State Revolving Fund, including more than $150 million to Ohio and seven other states, according to the National Wildlife Federation’s Great Lakes Regional Center.
The fund helps cities and regions fix and upgrade wastewater infrastructure to keep sewage overflows from running into the Great Lakes and the rivers and streams that lead into them.
In his budget, Obama proposes doubling the Earned Income Tax Credit for childless workers from $500 to $1,000 and lower the age of eligibility for workers from 25 to 21. To finance the expansion, Obama wants higher taxes on wealthy investors who run private equity funds.
If Congress approved the plan, nearly 8 million workers would qualify for the larger credit while 5.8 million workers would become eligible for the first time. The expansion would impact about 500,000 people in Ohio, either through a larger tax credit or new eligibility.
In a speech at an elementary school in Washington, Obama said “the most effective and historically bipartisan ways to reduce poverty and help hardworking families pull themselves up is the Earned Income Tax Credit.’’
Democrats such as Sen. Sherrod Brown of Ohio hailed Obama’s call to expand the EITC, saying that “as we continue our economic recovery, it’s vital that we pursue policies that reward Americans for hard work and provide them greater opportunities. We can accomplish this by strengthening the EITC and expanding its eligibility to workers without children.”
But Obama disappointed advocates of smaller deficits by avoiding new spending restraints on the entitlement programs of Social Security, Medicare and Medicaid. By doing so, the White House acknowledged the government will run annual deficits in excess of $400 billion annually through 2024.
“After years of fiscal and economic mismanagement, the president has offered perhaps his most irresponsible budget yet,’’ said House Speaker John Boehner, R-West Chester Twp. “In the president’s vision for our future, America’s budget never balances – ever.’’
Sen. Rob Portman, R-Ohio, said that “rather than laying out a path to address our economic challenges and spur job creation, this budget increases spending next year alone by $100 billion, dramatically raises taxes by $1.2 trillion, and adds $8.3 trillion to our national debt.’’
Agriculture: The recently-enacted five-year farm bill made some cutbacks to farm subsidies that the Obama administration has called for annually. But the administration would like that reform to go even further by scaling back crop insurance. Discretionary spending: $22.2 billion. Percentage change from 2014: 7.9 percent decrease.
Commerce: The department budget proposes spending $2 billion on the National Oceanic and Atmospheric Administration to develop its next generation weather satellite systems, which helps NOAA forecast storms and issue warnings on significant changes in weather conditions. Discretionary spending: $8.8 billion. Percentage change from 2014: 6 percent increase.
Defense: The Pentagon is proposing to shrink the size of the military, applying a no-growth $495.6 billion budget to modernizing the force in ways that it says will enable the country to meet national security challenges in the aftermath of long and costly wars in Iraq and Afghanistan. Discretionary spending: $495.6 billion. Percentage change from 2014: 0.4 percent decrease
Education: President Barack Obama’s goal is to expand high quality early childhood programs. In particular, he’s sought to create universal pre-K programs for 4-year-olds. His budget would provide $1.3 billion to states to roll out “preschool for all” programs aligned with school systems funded by a tobacco tax hike as part of a 10-year, $75 billion plan. Discretionary spending: $68.6 billion. Percentage change from 2014: 1.9 percent increase
Energy: Obama again would increase spending for two priorities: clean energy and national security. The budget proposal calls for $11.7 billion for nuclear security, a 4 percent increase over the current budget. Much of that money, $8.3 billion, would go to maintain a nuclear deterrent in a joint program with the Defense Department. Discretionary spending: $27.9 billon. Percentage change from 2014: 2.6 percent increase
Homeland Security: Obama’s proposed homeland security budget would provide money to hire 2,000 new Customs and Border Protection officers to work at the country’s ports of entry. The budget also proposes another 2,000 officers whose positions would be funded by user fees. Lawmakers and others have repeatedly complained to the Homeland Security Department that long waits at borders and airports hinders both business and tourism and have repeatedly asked for more border officers. Discretionary spending: $38.2 billion. Percentage change from 2014: 2.8 percent decrease
NASA: NASA’s budget would essentially remain about the same with a tiny decrease. But if the Obama Administration gets its “opportunity” add-on budget, NASA would get an extra $885 million. That would make the space agency’s budget rise by 4.5 percent. Discretionary spending: $17.5 billion. Percentage change from 2014: 0.6 percent decrease.
Transportation: The proposal includes $302 billion over the next four years for road, bridge, rail and transit programs. Transit and passenger rail spending would jump from $12.3 billion to $22.3. Discretionary spending: $14 billion. Percentage change from 2014: 2.2 percentage increase.
Veterans Affairs: The bulk of the department’s discretionary spending — $56 billion — would go toward veterans’ medical care. Obama seeks a 2.7 percent increase in medical spending as the number of patients treated at VA hospitals and outpatient clinics continues to rise. VA health care enrollment is projected to reach 9.3 million in 2015. Discretionary spending: $65.3 billion. Percentage change from 2014: 3 percent increase.