While presenting the budget before the House Ways and Means Committee, U.S. Treasury Secretary Jacob Lew stated that short term unemployment is becoming less of a problem, but an increasing concern is no curb in sight for long term unemployment. For this reason, the budget calls for an extension to long term unemployment benefits. Secretary Lew also brought up the minimum wage debate. He noted that the President believes that raising the minimum wage would be beneficial for the economy, because people tend to spend more money when they have more income coming in.
Education is another key component in this year’s budget, which the President showcased by unveiling the proposal at Powell Elementary School in Washington, D.C. His budget emphasizes early childhood education and a ‘Preschool for All’ initiative. The goal of this initiative is to provide preschool for all middle class families as well as create an all-day kindergarten policy throughout the nation. There is also funding dedicated to high schools, with $150 million for redesigning learning environments to advance skills necessary for future jobs.
The budget also directs more funding to several of President Obama’s safety and security initiatives. The ‘Now is the Time’ initiative, which lays out a comprehensive plan to reduce gun violence, gets an additional $164 million in the proposal. Specifically, this request includes $35 million in new resources prevent those who are not eligible to purchase or possess guns from obtaining them. This also includes $13 million for improvements in the National Instant Criminal Background Check System (NICS) to address the increasing volume of firearm background checks.
The budget calls for tax code changes that would strengthen and simplify tax incentives for research and clean energy programs. Other changes would close some tax loop-holes and eliminate special-interest subsidies. It also calls for the President’s biggest tax increase yet on multinational corporations' overseas earnings, largely by penalizing companies that offshore their profits.
Administration officials said these changes would be paired with a separate reduction in corporate tax rates that will hopefully be included in a broad tax overhaul proposal currently making the rounds in Congress. However, with the tense partisan environment in Washington, particularly during an election year, chances are dimming for a major tax rewrite.
Jordan Butcher is an intern with Financial Executives International's Government Affairs office.