The President’s Budget Reflects The Need To Invest In Our Middle Class
Today, President Obama released his seventh budget, a budget that would build on the gains of our economic recovery by investing in the middle class and helping working families succeed in a 21st Century global economy. While Congressional Republicans would prefer to play politics with national security, the President’s budget lays out a bold vision to create good jobs and increase wages for all workers. Obama’s budget would reject the automatic budget cuts that have cut military and domestic spending sharply in the last few years while investing in the middle class. As President Obama said, “I am not going to accept a budget that locks in sequestration going forward. I want to work with Congress to replace mindless austerity with smart investments that strengthen America. And we can do so in a way that is fiscally responsible.”
Investing In Education And Working Families
The President’s budget is built on the idea that investing in the middle class will help grow the economy sustainably and broadly, rather than doubling down on the failed idea of trickle-down economics. That all starts with education and this budget includes a number of education investments, including:
- $750 million for high-quality, early childhood education, increasing the budget by $500 million.
- more than $3 billion for education in the STEM fields (science, technology, engineering and math).
- tuition-free community college for good students, which would cost $60 billion over 10 years.
The budget invests in working families by:
- establishing a $2.2 billion grant program to encourage states to create paid sick and family leave programs.
- expanding the child care tax credit by up to $3,000 per child.
- increasing the pay of military and federal employees by 1.3 percent.
- expanding the Earned Income Tax Credit for families with two earners to make work really pay for working families.
Investing in education and increasing pay and protections for workers will mean real, tangible gains for the middle class and working families.
Investing In Infrastructure
The President’s budget also calls for a new infrastructure program, one of the few issues with bipartisan support in the new Congress. The $478 billion proposal, paid out over six years, would work to upgrade our roads, railroads, ports, bridges and public transit systems. Following years of poor grades for the nation’s infrastructure, it’s time to address our crumbling roads and bridges. Investing in highways and mass transit will grow our economy, a critical step to putting more families on the path to the middle class.
Ensuring Continued Fiscal Sustainability
The President’s budget would build on the substantial progress already made to place the federal budget on a sustainable long-term path by making sure that everyone pays their fair share. Under this president, the deficit has fallen by about two-thirds as a share of GDP since fiscal year 2009. The President’s budget continues steering the nation on a responsible, sustainable fiscal path by:
- keeping health care costs in check by building on the reforms in the Affordable Care Act.
- realizing the savings of comprehensive immigration reform.
- reforming the inefficient tax code, by eliminating a number of tax privileges that benefit the 1 percent, who have pocketed the vast majority of the economic gains since the Great Recession.
The budget also includes a one-time 14 percent tax on the profits corporations are currently holding overseas. Going forward, multinational corporations would pay a minimum tax of 19 percent on foreign profits.
BOTTOM LINE: The President’s budget goes far to realize the holes in our economic system today. The economy has grown for everyone – it has only benefited the well off. So the wealthy few have reaped the benefits of our recovery while hard-working Americans fall further behind. But by investing in education, workers, families and infrastructure, we can build on recent economic gains to create an economy that works for the middle class.
The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.