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Friday, July 12, 2024 | Back issues
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Obama Unveils $4.1 Trillion Budget Amid GOP Backlash

WASHINGTON (CN) - President Barack Obama unveiled his final budget Tuesday, a $4.1 trillion proposal that calls for tax hikes on the rich, pumps up funding to combat climate change, and calls for new initiatives in education and health care.

Standing little chance of getting through the Republican-controlled Congress, the budget increases spending by roughly $200 billion in 2017, about 5 percent above 2016 levels.

But thanks in part to new taxes on the wealthy and other reforms, the proposal would knock more than $100 billion off of the deficit in 2017 and more than $2.9 trillion over 10 years.

"The budget is a roadmap to a future that embodies America's values and aspirations: a future of opportunity and security for all of our families; a rising standard of living; and a sustainable, peaceful planet for our kids," Obama wrote in the budget message delivered to Congress. "This future is within our reach."

Obama's budget achieves deficit reduction in part through the implementation of the "Buffett Rule," a tax plan named after billionaire Warren Buffett that calls for increased tax rates for people in the highest tax brackets. The plan would cut more than $100 billion off the deficit by 2021, according to tables in the budget document.

The tax hike would help pay for new investments in education, including a preschool-for-all initiative, which provides grants to states to help them expand programs meant to give children from low- and moderate-income families access to preschool.

Obama's final budget also funds America's College Promise, which would give "responsible students" two years of free community college, as well as providing grants to historically black colleges to help them reduce tuition for first-time, low-income students, according to an administration fact sheet.

"Higher education is the clearest path to the middle class," Obama wrote in his budget message. "By 2020, two-thirds of jobs will require some education beyond high school. For our students and for our economy, we must make a quality college education affordable for every American."

In addition to the increased funding for education, Obama also proposed a plan to further computer science education in high schools, an initiative he announced at the end of January that he says would help students be more prepared to compete in a rapidly changing job market.

Obama also made good on a promise in his State of the Union address to put Vice President Joe Biden in charge of a new "moonshot" to fight against cancer. The 2017 budget proposal sets aside $1 billion in funding for research into new cancer treatments and tests.

Less than two months after the administration claimed victory on an international climate-change agreement struck in Paris, Obama's budget contains steps to begin implementing the landmark accord.

The budget funds Mission Innovation, a call to double research and development on clean energy, as well as a program that calls for an infrastructure modernization effort to bring on board new, more environmentally friendly technologies like high-speed rail.

Beyond this initiative, the budget sets aside $1.3 billion for investments in solar, wind and other clean sources of energy, as well as investments in programs to help communities deal with droughts, fires and flooding caused by climate change.

The budget also sets aside $750 million for the Green Climate Fund, an international pool of money that would help developing countries cut back on emissions while lessening the blow such action would have on their fragile economies.

The fund has been a sticking point with Congress, as Republican senators pledged ahead of the Paris talks to withhold funds if Congress did not have a say in the climate agreement.

The modernization programs would come at the expense of oil companies, which would pay an oil fee that would generate $319 billion in revenue over 10 years. The fee fits the larger goal in Obama's budget to end tax preferences for fossil fuels, which would reduce the deficit by $38 billion by 2026, according to the budget document.

Senate Minority Leader Harry Reid lauded the budget as a gift for the middle class and hit Senate Republicans for their reaction to the proposal.

"The president deserves praise for putting the middle class first, investing in our future, restoring fiscal discipline and asking millionaires and billionaires to pay their fair share," Reid said in a statement. "It's telling that, for the first time in the Budget Committee's history, Republicans will prevent the public from learning about the President's budget in an open hearing. This takes hyper-partisanship to a new extreme, and makes a mockery of Republicans' pledges to restore the regular order."

Republican lawmakers meanwhile took a harsher tone, criticizing the proposal for expanding government reach and raising costs for the American people.

"President Obama will leave office having never proposed a budget that balances - ever," Speaker of the House Paul Ryan said in a statement. "This isn't even a budget so much as it is a progressive manual for growing the federal government at the expense of hardworking Americans. The president's oil tax alone would raise the average cost of gasoline by 24 cents per gallon, while hurting jobs and a major sector of our economy. Americans deserve better. We need to tackle our fiscal problems before they tackle us. House Republicans are working on a balanced budget that grows our economy in order to secure a Confident America."

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