Top 5 Things to Know About President Obama’s 2014 Budget

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This post was first published on the National Priorities Project Blog.

President Barack Obama confers with Chief of Staff Denis McDonough as he talks on the phone in the Oval Office. (White House flickr)

This week President Obama released his fiscal 2014 budget proposal, which set a record for arriving two months after the legal deadline of the first Monday in February. Here are the top five things to know about the new budget.

5. The president’s budget would reduce Social Security cost-of-living adjustments through “chained CPI.”
President Obama became the first Democratic president ever to propose reductions in Social Security benefits by endorsing an alternate measure of inflation –- known as chained CPI –- to shrink cost-of-living adjustments for retirees. The president plans to save $230 billion over 10 years through this change. Nearly 90 percent of Americans oppose cuts to Social Security.

4. President Obama proposes universal access to prekindergarten education.
In his State of the Union address in February the president set out the goal of universal access to prekindergarten. This budget would provide funding to pursue that landmark initiative through an increase in taxes on tobacco products. A strong majority of Americans support expanded education funding.

3. The wealthiest taxpayers would enjoy fewer tax deductions while corporations would not see their taxes rise.
President Obama proposes limiting tax deductions for the wealthiest 2 percent of earners, as well as closing certain loopholes in the tax code such as “carried interest” that allows hedge fund managers to pay a special low tax rate. The budget also includes a “Buffett rule” to ensure that millionaires pay a minimum tax rate of 30 percent. The president does not propose any new taxes on corporations.

2. The Department of Defense would be cut by 1.6 percent.
The president proposes replacing the across-the-board cuts of sequestration with alternative means of deficit reduction. Therefore the Department of Defense is largely spared from cuts. The president’s budget includes $526.6 billion for the Pentagon’s base budget, a figure that does not include war costs or nuclear weapon activities at the Department of Energy. That represents a 1.6 percent cut relative to current levels.

1. The budget includes $3.8 trillion in new spending and achieves deficit reduction with a 2.5-to-1 ratio of spending cuts to new tax revenue.
In total, the president’s budget projects $3.8 trillion in spending for fiscal 2014 and plans for $1.8 trillion in deficit reduction over the coming decade. Together with $2.5 trillion in deficit reduction already enacted, the president is proposing a total deficit reduction package heavily tilted toward reducing spending, with a 2.5-to-1 ratio of spending cuts to new tax revenue.

See a full analysis of the president’s budget and a comparison of the president’s budget to proposals by the House and Senate, as well as to public opinion at the National Priorities Project website.

Mattea Kramer is a senior research analyst at the National Priorities Project. She is lead author of the new book A People’s Guide to the Federal Budget.
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  • MLK and FDR are needed NOW!

    Obama’s repeated efforts to cut Social Security, Medicare, and Medicaid benefits are an unforgivable betrayal of the American people and of 75 years of the Democratic Party. Social Security, by law, does not add one penny to the U.S. debt and deficit, so why is it even part of deficit talks? Also, just eliminating the arbitrary “cap” on payroll taxes (so that millionaires and billionaires pay their fair share) would fund Social Security fully forever! But Obama blatantly refuses to even discuss that obvious choice.

    As for Medicare and Medicaid, they would be fully funded if the U.S. would establish a single-payer nationalized health care system (the ONLY system that can control runaway medical costs). But the most important fact to always recall in these debates over cuts and taxes is that both Republican and Democratic Congresses and Presidents for the past 35 years have repeatedly impoverished the American people majority (through tax laws, trade laws, etc.) and have repeatedly enriched the corporations, the military, and mega-rich individuals to a cruel and inhumane extreme. Inequality of wealth in the U.S. is far worse than most Americans understand and is the worst by far of any prosperous “democracy” in the world.

    Given the past 35 years of government-caused decline of the middle-class and the poor, and the unfair government giveaways to the corporations, the military, and the mega-rich individuals, the latter three groups should be FORCED to pay back ALL of their ill-gotten gains and pay ALL of the deficit and debt! Especially when you add that there are tens of TRILLIONS of dollars hidden off-shore in tax-havens and that corporations have more cash than ever in history and pay the lowest taxes in over 50 years (and 25% pay NO taxes at all!).

    Obama’s efforts to STEAL money from the sick, the disabled, the poor, the elderly, orphans, and veterans is obscene and immoral. Instead, end the many very costly wars, end the unaffordable military-spy global empire, and restore the 95% progressive tax from the FDR-through-JFK era. Let the 1% ruling-class looters, war-mongers, gangsters, and banksters pay the bill for the debts and deficits that THEY ALONE have created! Let the common people resist and rebel against more theft by their own governmental “representatives.”

  • Roger Fight

    Let’s assume that the President doesn’t really want to cut social security, but needs public blowback to help him not do it. Follow this link to my petition of the White House web site to sign the petition.

  • Benjamin C. Spiridigliozzi

    He’s a liar and all about big money. He doesn’t deserve our respect since he betrayed us all with his campaign lies.

  • Susan Brennan

    OMG……………you have said this so well………..I thank you for that! Please continue to give voice to this truth. Thank you again.

  • rrk

    Why does every politician think that every time they need to find money that smokers must pay. Does he not realize that low & middle income people make up a majority of smokers

  • Lajo

    Maybe this will be a step toward saving them from themselves. Smokers’ health care costs and reductions in quality of life and work productivity could improved.

  • Nancy ONeil

    Do you not realize how much smokers cost the country in healthcare, lost productivity and environmental filth?

  • Mark G

    They are also the ones sitting in subsidized housing hooked
    up to oxygen and taking 25 pills a day to exist in retirement and being carted
    to the ER in an ambulance to have some cardio-pulmonary issue examined with
    several days hospital stay. And so by collecting those taxes now, it may
    help reduce the burden of those of us who try to live healthier lives and
    already pay through the nose.

  • Dianne Stanley

    Yes. they do realize that.

  • Dianne Stanley

    Let us talk about obesity as well.

  • mstaken

    Ah the “holier than thou” non or worse ex smokers. Like has been done for years now on the state level, taxes have been repeatedly raised on cigarettes, and the reasoning? get smokers to stop. In the meantime, those expected taxes ARE put into the budget. Then people either smoke cheaper, smoke less or … quit. And all the projected tax money never shows up. Now what? Who’s next to demonize?

    Let’s see … oh a “twinkie tax” – a tax on all fast food, candy, chips, doritos, you name it if it’s fast or junk food there’s an extra tax on it (and that includes soda)

    What else … a gaz azz tax – many people do need to drive to get to the market, the train station, etc. But you know, a lot of people get in the car and drive 5 minutes to the local corner store to pick up a quick loaf of bread … nah, time to start walking or riding a bicycle or pay an extra gaz azz tax for being lazy

    Umm … a boozer tax – anything alcoholic, an extra tax, whether it’s a 6-pack to watch the game with or a bottle of fine wine to have with dinner or the Friday night martini. Anything with alcohol gets a boozer tax

    There’s 3 new sources of revenue, at least 2 of them have a potential of raking in some good money, at least until people wake up and start eating and drinking a little healthier. And btw? I don’t smoke, I’m just tired of seeing smokers being the bad guys and blamed for everything. I’ve seen the standing at the corner waving arms and coughing a block away while trucks and buses go past you … but you don’t breathe any of those fumes in, do you. Just that lone smoker down the street, tsk.

  • mstaken

    Really? only smokers are the ones “sitting in subsidized housing …”? Odd, I am a single, have no family or other support than my SSDI because I am permanently disabled and have recently applied for low income (subsidized) disabled/senior housing. There’s a good chance at some point I will need oxygen due to left ventricle hypertrophy and I do already have to take a number of pills. However, the building is a non-smoking building, I don’t smoke and I’m a vegetarian (first by choice now by necessity having $40 a month to buy food with). So that kind of blows your generalization out of the water some.

  • Patrick Dyer

    “This is the best we can do, folks. This is what we have to offer. It’s what our system produces: garbage in, garbage out.” ~George Carlin~

  • EG

    So you wouldn’t be effected by this tax at all. Ok, what was your point?

  • David Holmes

    Obama is a traitor to those that voted for him. – His betrayal shows he is merely a puppet for corporations. For a few to have more than they need, many will have less than they need.

  • P. G.

    Yes. Thanks for this. It is well-reasoned and clear.

  • MLK!

    Thank you. Very well put.

  • corruptedmind

    except repubs thought of it first..obama is just giving in because he wants something in return

  • MLK and FDR are needed NOW!

    To “corruptedminded”: actually, Obama has been saying that he wanted to “reform entitlements” (that is, cut SS, M & M) since at least 2006 (two years before he was even President and long before the current and recent negotiations with Republicans over the budget, the debt ceiling, or the fiscal cliff.

    Obama repeated his intention to cut SS, M & M in January 2009, as soon as he was President. Then he created the Deficit (“Catfood”) Commission by executive order (after Congress refused to do so), and he unfairly “stacked it” with co-chairs and members who are HOSTILE to SS, M & M!

    Then Obama offered huge cuts to SS, M & M in summer 2011, again in December 2012, and now in April 2013. Obama’s persistent, consistent efforts to cut SS, M & M strongly indicate (or prove) that Obama WANTS to cut SS, M & M! Doing so is central to his neo-liberal, conservative beliefs, values, and goals — and consistent with his being a servant to the 1% ruling-class and their capitalist-imperialist system and empire. (On issues like war, drones, kill lists, indefinite detention, civil liberties, whistleblowers, warrantless spying on U.S. citizens, and so on, Obama is even more of a reactionary neo-conservative than Bush and Cheney!)

    Don’t listen to Obama’s fake-liberal-rhetoric and false-progressive-promises! Instead, look closely and think hard about what he does and what he fails to do, and about who he appoints to power and who he fails to appoint to power. (For example, NO jobs program, NO anti-global-warming program, and NO liberal reformers like Krugman or Stiglitz, much less radical leftists like Nader, Chomsky, or Hedges in Obama’s cabinet.)

    It’s time to STOP making excuses for Obama and his harmful, regressive policies and personnel choices. Obama is severely and repeatedly hurting the common people, the Democratic Party, the nation, other nations, and the planet! (Republicans and Tea Partiers are even worse, but Obama and most Democrats are extremely harmful too.)

    The American people need a strong people’s party (and a strong people’s movement) that will take power away from both the Democratic and Republican parties, both of which are completely corrupted, corporate-owned parties that almost never represent what the common people (99% majority) need, want, and demand.

  • DKM

    Fantastic job of expressing how I feel about Obama now. I feel totally betrayed by Obama now! I can’t believe he is proposing to do with his repeated efforts to cut Social Security, Medicare, and Medicaid benefits. Meanwhile, huge corporations are not paying any taxes, while they have their money hidden in off-shore in tax-havens and that corporations have more cash than ever in history and pay the lowest taxes in over 50 years (and 25% pay NO taxes at all!). I feel bad because I voted for him, thinking Romney had no clue what the average American is going through now. I guess it wouldn’t have mattered either way. It’s all a scam apparently!

  • steven sanders

    Social Security has been being reduced by the same process the banksters have been using to rob 99% of us for decades. An economist has proven that the inflation rate is a gross fraud. In the 10 years prior to the 2008 financial collapse inflation was running 9.5% yearly on average while the government was claiming 2.5%. So if your income increased by 2.5% a year then you’ve actually had a 70% reduction in income over those ten years. This is why 2 people working collectively 112 hours a week (this was the average hours worked in the mid 90s, I don’t have recent numbers) have a significantly lower standard of living then a single income family working forty hours a week 40 years ago, despite our nation actually being much wealthier.

  • Your worst nightmare

    Show some sources and some real data for your made up numbers, or otherwise **don’t post**. You clearly don’t understand economics.

    ** Edited by moderator