Politics

Obama’s Record Budget: Tax the Rich, Help Middle Class

Published

12 years ago

February 3, 2015

ANDREW TAYLOR, Associated Press

WASHINGTON (AP) — Promising to help America’s middle class, President Barack Obama on Monday sent Congress a record $4 trillion budget that would hammer corporate profits overseas and raise taxes on the wealthy while boosting tax credits for families and the working poor.

Obama’s budget also would steer hundreds of billions of dollars to the nation’s crumbling infrastructure of roads and bridges, help provide two years of free community college and reverse the across-the-board, automatic budget cuts that have slammed the Pentagon and nearly every government department.

In the face of certain opposition from Republicans, an optimistic Obama hailed a “breakthrough year for America” of new jobs, lower unemployment and shrinking deficits after the great recession of 2008, and he called for moving past years of “mindless austerity.” The blueprint for the 2016 budget year that begins Oct. 1 represents a 6.4 percent increase over estimated spending this year, projecting that the deficit will decline to $474 billion.

However, Obama’s plan ignores the new balance of power in Washington, with Republicans running both the House and Senate. The GOP found plenty to criticize in his proposed tax hikes that would total about $1.5 trillion.

Republicans cited the nation’s $18 trillion debt and assailed what they call Obama’s tax-and-spend policies for failing to address the spiraling growth of benefit programs such as Social Security and Medicare.

“Today President Obama laid out a plan for more taxes, more spending, and more of the Washington gridlock that has failed middle class families,” said House Speaker John Boehner, R-Ohio. “This plan never balances — ever.”

Republicans aren’t offering specifics yet but will respond this spring with their own plan, a balanced-budget outline promising to get rid of “Obamacare,” ease the burdens of the national debt on future generations, curb the explosive growth of expensive benefit programs and reform a loophole-cluttered tax code in hopes of promoting economic growth.

While Obama’s plan was rejected out of hand on budget day, proposals to ease automatic cuts and boost transportation funding are likely to return later in the year and require extensive negotiation.

“These proposals are practical, not partisan,” Obama said of his overall plans. “They’ll help working families feel more secure with paychecks that go further, help American workers upgrade their skills so they can compete for higher-paying jobs, and help create the conditions for our businesses to keep generating good new jobs for our workers to fill.”

Some people would pay more. Many wealthy Americans would only be able to take tax deductions at a 28 percent rate even though their incomes were taxed at 39.6 percent, and some would also see an increase in their maximum capital gains rate.

However, a couple earning up to $120,000 a year would qualify for a new “second earner” tax credit of up to $500 as well as a maximum $3,000 per-child tax credit for child care for up to two children, triple the current credit of $1,000.

Obama’s initiatives to tax the wealthy and to welcome an influx of immigrants into the United States are going nowhere in the new GOP-run Congress.

But there is a bipartisan desire to ease automatic spending cuts that are the product of Washington’s failures to cut deficits beyond an initial round in 2011. Both Republicans and Democrats are howling that such broad cuts savage the Pentagon. Obama said he won’t give more money to the Pentagon without receiving domestic funds he wants.

“It would be bad for our security and bad for our growth,” Obama said Monday at the Department of Homeland Security.

The centerpiece of the president’s tax plan is an increase in the capital gains rate on couples making more than $500,000 per year. The rate would climb from 24.2 percent to the Reagan-era top rate of 28 percent. Obama also wants to require estates to pay capital gains taxes that reflect the increase in value of assets like homes and stocks prior to death instead of after inheritance. And he is trying to impose a 0.07 percent fee on the roughly 100 U.S. financial companies with assets of more than $50 billion, raising $112 billion over 10 years.

All told, Obama proposes higher receipts of about $2 trillion though his budget: about $1.5 trillion from tax increases and almost $500 billion from fresh revenue as immigration reform lifts the economy and provides new workers.

His proposals would boost federal spending by $74 billion — divided between the military and domestic programs — and would result in a spending increase of $362 billion over the remaining six years the spending caps were to have been in place.

The deficit would remain under $500 billion a year through 2018, but would rise to $687 billion by 2025, according to administration projections — though levels of red ink could still be considered manageable when measured against the size of the economy.

But the cost of financing the government’s debt would spiral as the debt grows to more than $25 trillion by 2025 and interest rates rise. According to the projections. Interest costs would jump from $229 billion this year to $785 billion in 2025.

A principal theme this year is infrastructure — the budget books’ cover photo is the deteriorating Tappan Zee bridge over the Hudson River — and the plan includes a six-year, $478 billion transportation and infrastructure plan. Gasoline tax revenues would cover only half the cost, so Obama proposes a 14 percent tax on overseas corporate profits to bring in $238 billion. The combination would permit about a one-third increase in spending, with transit programs being the biggest winners.

Obama’s plan contains a lengthy roster of proposals that have been repeatedly rejected by lawmakers: $600 billion in additional revenue over a decade by limiting tax deductions for upper bracket earners; $95 billion from nearly doubling the cigarette tax to $1.95 a pack, and $35 billion through a minimum 30 percent tax rate on million-dollar incomes.

He wants to increase the security fee paid on air travel from $5.60 to $7.50 per one-way ticket. And there’s a new 10-year, $2.5 billion proposal to limit the deductibility of gifts that boosters of college teams give to earn the right to buy basketball and football tickets.

The White House claims $1.8 trillion in deficit savings over 10 years but does so by taking liberties such as ignoring the cost of preventing Medicare cuts to doctors’ fees and extending refundable tax credits for the working poor and couples with children that expire in 2017.

___

Associated Press writers Martin Crutsinger and Jim Kuhnhenn contributed to this report.

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OP-ED: Proposition 44 Would Put a Price on Trust

The danger in Proposition 44 is not only its 90 percent figure. It is that the meaning of “qualifying” spending will be worked out later. A clinic preparing a budget today may not know whether a navigator, health educator, transportation program, outreach worker, technology upgrade, or other patient-support service will be counted the way it expects. Yet the financial consequence of getting it wrong could be immediate.

Published

15 hours ago

October 6, 2026

Post News Group

Oakland’s public conversation about health care must begin with a simple truth: a doctor’s appointment is not the same thing as access to care.

For a mother juggling work and child care, access may mean a text-message reminder, a bus pass, an evening appointment, or someone who can explain what Medi-Cal covers. For an older patient managing diabetes, it may mean help scheduling a specialist visit and understanding new medications. For a family that has been dismissed or misunderstood in medical settings, access may begin with meeting a community health worker who knows the neighborhood, speaks their language, and treats their concerns with respect.

Community health clinics make that kind of care possible. They are part medical provider, part navigator, part educator, and part trusted local institution. Proposition 44 threatens to narrow the definition of what counts as patient care in a way that could undermine the very supports that allow patients to receive it.

The statewide measure would require covered nonprofit community clinics to spend at least 90 percent of their annual revenue on health care or qualifying program services. The ballot measure directs the Attorney General to establish more detailed guidance on what expenses qualify. Clinics that do not meet the threshold could face penalties for the difference. The Legislative Analyst’s Office reports that affected clinics currently spend an average of about 80 percent of revenue on health care services.

A percentage may look like a clean measure of accountability. But health care is not cleanly divided between what happens inside an examination room and everything that enables a patient to enter one.

Consider the work that happens before and after a visit. Clinic staff maintain confidential patient records. They follow up after missed appointments. They keep information systems secure. They recruit and train employees in an expensive and competitive health care labor market. They coordinate referrals, process claims, purchase supplies, maintain buildings, and make certain that patients are not lost somewhere between diagnosis and treatment.

Oakland families should not be asked to accept the fiction that these functions are unrelated to care.

The Legislative Analyst’s Office says clinics falling short of the requirement could be required to pay the shortfall amount to the state and could seek to recover the money only if they show compliance within five years. The same analysis estimates state enforcement costs in the low tens of millions of dollars annually, supported by fees.

That is a troubling arrangement for organizations that are expected to provide care to people with the fewest alternatives.

Oakland has learned that trust is not built through slogans. It is built when a patient is listened to, when a parent can secure an appointment for a child, when a clinic returns a call, and when a person receives help without being shamed for their income, insurance, language, immigration history, or prior experience with the system.

For Black residents in particular, trustworthy care is not an abstract goal. Persistent inequities in health outcomes and patient treatment are real. Community-centered clinics can help bridge the gap with culturally responsive staff, patient navigators, behavioral-health programs, and partnerships that understand the conditions shaping health outside the clinic door.

Proposition 44 could pressure providers to treat those supports as expendable because they do not fit neatly into a state-enforced formula. That would be a mistake.

Accountability is necessary. Clinics that receive public resources should be transparent, well governed, and focused on their mission. But good oversight asks whether patients are being served well, whether money is managed responsibly, and whether communities can obtain needed care. It should not rely on a rigid ratio that may punish clinics for doing the hard work of reaching people who need more than a brief medical encounter.

A broad coalition of providers and community organizations opposes Proposition 44, including the California Primary Care Association, the California Medical Association, the California Hospital Association, Planned Parenthood Affiliates of California, and the California Teachers Association.

Oakland needs health policy that expands the circle of care. Proposition 44 risks drawing that circle smaller.

The Oakland Post editorial board urges a No vote on Proposition 44.

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OP-ED: Proposition 40: It’s Time to Play Chess, Not Checkers

Proposition 40 would impose a one-time 5 percent tax on the wealth of Californians with more than $1 billion in assets. Most of that money would go toward health care, with the remainder supporting food assistance and education-related programs.

Published

15 hours ago

October 6, 2026

Post News Group

By Paul Cobb, Publisher, Oakland Post

I understand the frustration driving Proposition 40. I share our labor partners’ concerns about protecting health care and essential services at a time when working families are already under enormous pressure.

But labor itself is divided over Proposition 40, and there is good reason to look carefully at what this measure could mean beyond the money it promises to raise.

Those are worthy investments. The question is whether this is the right way to pay for them.

California’s independent Legislative Analyst says the measure could raise tens of billions of dollars in the short term. But that same analysis warns that California could eventually lose hundreds of millions of dollars a year in ongoing income-tax revenue if some wealthy taxpayers leave the state or change their financial behavior.

That matters because those dollars help support the General Fund and the broader system of programs and services Californians rely on.

So let’s be clear: This is not about feeling sorry for billionaires. Billionaires will be fine.

This is about protecting the people who will not be fine if we get the policy wrong.

For decades, those of us in Black media have watched public policy debates move from crisis to crisis. We have also watched Black communities deal with the consequences when decisions made in Sacramento or Washington did not fully consider what would happen two, three, or four moves later.

We know what happens when funding disappears. Community organizations struggle. Small businesses lose support. Programs serving young people are squeezed. Schools and local governments are asked to do more with less. The people with the fewest resources are usually the first to feel the consequences.

That history should make us cautious about making major changes to California’s tax system without considering the entire board.

If California believes billionaires should contribute more, then let’s have that conversation. There is nothing unreasonable about asking whether people who have benefited enormously from California’s economy should contribute more to sustaining it.

But we should build tax policy that is thoughtful, sustainable, and difficult to avoid. We should not create a temporary solution that could leave us confronting another revenue problem down the road.

This is also why I respect those in labor who support Proposition 40, even though I have reached a different conclusion. They are responding to very real concerns about health care and the people who depend on it. Those concerns should not be dismissed.

But neither should legitimate questions about Proposition 40.

Too often our politics tells us that if we agree with the goal, we must agree with the proposed solution. That is not how responsible public policy works.

You can believe health care must be protected and still question the mechanism being proposed to protect it.

You can believe billionaires should pay more and still ask whether this particular tax is the smartest way to accomplish that.

And you can stand with working people while insisting that California consider the long-term consequences for all of the public programs working people depend upon.

We need to stop treating complicated economic decisions like a game of checkers, where we look only at the move directly in front of us.

We need to play chess.

Look at the whole board. Think several moves ahead. Understand what happens after the first check is collected and spent.

The question before Californians is not whether billionaires can afford to pay more. They can.

The question is whether Proposition 40 is the right way to do it and whether we are confident enough in the consequences to make this kind of change.

Our communities cannot afford for us to discover the answer too late.