President Obama's $4 trillion budget hinges on what Obama calls "middle-class economics," seeking tax breaks for many Americans while imposing increases on top earners, corporations and particularly the financial sector. Many have called it Robin-Hood Economics, and House Ways and Means Committee Chairman Paul Ryan accuses Obama of exploiting "envy economics." Probably the most controversial aspect is his recently announced six-year, $478 billion public-works program for highway, bridge and transit upgrades, half-financed with a one-time, 14% tax on U.S. companies' overseas profits. As Ryan warned, "This top down redistribution doesn't work."
President Obama is due to speak at 1155ET (plan accordingly)
As AP reports,
Obama, interviewed by NBC before the start of Sunday's Super Bowl game, said he believed there were areas where he can work with Republicans, who for the first time in his presidency control both houses of Congress.
"My job is not to trim my sails and not tell the American people what we should be doing, pretending somehow we don't need better roads, that we don't need more affordable college," Obama said.
Obama's budget emphasizes the same themes as his State of the Union address last month, when he challenged Congress to work with him on narrowing the income gap between the very wealthy and everyone else.
Higher taxes on top earners and on fees paid by the largest financial institutions would help raise $320 billion over 10 years which Obama would use to provide low- and middle-class tax breaks.
His proposals: a credit of up to $500 for two-income families, a boost in the child care tax credit to up to $3,000 per child under age 5, and overhauling breaks that help pay for college.
Obama also is calling for a $60 billion program for free community college for an estimated 9 million students if all states participate. It also proposes expanding child care to more than 1.1 million additional children under the age of 4 by 2025 and seeks to implement universal pre-school.
Obama's budget also proposes easing painful, automatic "sequester" cuts to the Pentagon and domestic agencies with a 7 percent increase in annual appropriations, providing an additional $74 billion in 2016, divided between the military and domestic programs.
Many Republicans support the extra military spending but oppose increased domestic spending.
Another centerpiece of the president's tax proposal is an increase in the capital gains rate on couples making more than $500,000 per year. The rate would climb from 23.8 percent to 28 percent.
Obama wants to require estates to pay capital gains taxes on securities at the time they are inherited. He also is trying to impose a 0.07 percent fee on the roughly 100 U.S. financial companies with assets of more than $50 billion.
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