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CBO: Deficit to Shrink to Lowest Level of Obama Presidency

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In this March 4, 2014 file photo, copies of President Barack Obama'’s proposed fiscal 2015 budget are set out for distribution on Capitol Hill in Washington. The Congressional Budget Office says the federal budget deficit will shrink this year to its lowest level since President Barack Obama took office. CBO says the deficit will be $468 billion for the budget year that ends in September. That’s slightly less than last year’s $483 billion deficit. As a share of the economy, CBO says this year’s deficit will be slightly below the historical average of the past 50 years. (AP Photo/J. Scott Applewhite, File)

In this March 4, 2014 file photo, copies of President Barack Obama’’s proposed fiscal 2015 budget are set out for distribution on Capitol Hill in Washington. The Congressional Budget Office says the federal budget deficit will shrink this year to its lowest level since President Barack Obama took office. CBO says the deficit will be $468 billion for the budget year that ends in September. That’s slightly less than last year’s $483 billion deficit. As a share of the economy, CBO says this year’s deficit will be slightly below the historical average of the past 50 years. (AP Photo/J. Scott Applewhite, File)

STEPHEN OHLEMACHER, Associated Press

WASHINGTON (AP) — Solid economic growth will help the federal budget deficit shrink this year to its lowest level since President Barack Obama took office, according to congressional estimates released Monday.

The Congressional Budget Office also projects a 14 percent drop in the number of U.S. residents without health insurance, largely because of Obama’s health law.

In a report released Monday, CBO says the deficit will be $468 billion for the budget year that ends in September. That’s slightly less than last year’s $483 billion deficit.

The official scorekeeper of Congress projects solid economic growth for the next few years, with unemployment dropping slightly.

“In CBO’s estimation, increases in consumer spending, business investment and residential investment will drive the economic expansion this year and over the next few years,” the report said.

CBO also cited wage increases, rising wealth and the recent decline in oil prices.

For future years however, CBO issued a warning: Beyond 2018, deficits will start rising again as more baby boomers retire and enroll in Social Security and Medicare. By 2025, annual budget deficits could once again top $1 trillion, unless Congress acts.

At that point, Social Security benefits would account for one-quarter of all federal spending, said CBO Director Douglas Elmendorf.

“The underlying point is that we have a handful of very large federal programs that provide benefits to older Americans,” Elmendorf said. “And with the rising number of older Americans and a rising cost of health care, those programs get much more expensive.”

CBO says the number of U.S. residents without health insurance will drop from 42 million last year to 36 million this year, largely because of Obama’s health law. These numbers don’t include people who are in the U.S. illegally, who are ineligible for subsidies under the health law.

The report says 19 million people will have health insurance because of the law, which could make it harder for congressional Republicans to make good on promises to repeal it.

Obama inherited an economy in recession when he took office. The annual deficit topped $1 trillion for each of his first four years in office, including a record $1.4 trillion in 2009.

As a share of the economy, CBO says this year’s deficit will be slightly below the historical average of the past 50 years.

The federal budget deficit became a big issue during Obama’s early years in office. In 2011, Obama and congressional Republicans struck a deal that resulted in significant spending cuts at many government agencies. At the start of 2013, Obama persuaded Congress to further address the deficit by raising taxes on top earners.

The White House said Monday that Congress still has more to do. “CBO’s longer-term budget and economic projections confirm the need for Congress to act to strengthen our economy for the middle class while putting our debt and deficits on a sustainable trajectory, including by making the investments that will accelerate economic growth and generate good new jobs for our workers to fill,” Deputy Press Secretary Eric Schultz said in a statement.

Declining budget deficits, however, could reduce pressure on Congress to continue addressing the government’s finances.

“Over the last few years as deficits have fallen, so too has the effectiveness of Republican rhetoric about a ‘big government’ boogeyman,” said Sen. Charles E. Schumer, D-N.Y. “Now is the time for Republicans to join with Democrats to invest in constructive programs that help middle-class Americans climb the ladder and achieve the American dream.”

Republicans, however, signaled that they aren’t done cutting spending.

“Thanks to Republicans’ efforts to cut spending this year’s deficit is projected to be smaller, but in order to balance the budget we must address the true drivers of our debt,” said Cory Fritz, a spokesman for House Speaker John Boehner, R-Ohio. “Real, robust economic growth won’t occur until we solve our government’s spending problem.”

CBO projects that the economy will grow at an annual rate of 3 percent in both 2015 and 2016. In later years, however, CBO projects slower economic growth as more baby boomers retire and the labor force grows more slowly than it did in the 1980s and 1990s.

CBO projects the unemployment rate will gradually decrease to 5.3 percent in 2017. It is now 5.6 percent.

“CBO’s report is important, but it only tells us part of the story,” said Sen. Bernie Sanders, a Vermont independent and the ranking minority member of the Senate Budget Committee. “What we must never forget is that tens of millions of Americans today are struggling to keep their heads above water economically while the disparity between the rich and everyone else is growing wider every day.”

The budget agency bases its budget projections on current law, assuming that temporary provisions will be allowed to expire. However, many temporary laws are routinely extended, including dozens of temporary tax breaks and a provision that prevents steep cuts in Medicare payments to doctors.

Future budget deficits would be higher if those provisions are continued. For example, if dozens of temporary tax breaks are extended, they would add $1 trillion to the deficit over the next decade.

___

Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Business

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.

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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 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.

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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Business

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.

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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.

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.

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.

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Activism

Oakland Post: Week of September 30 – October 6, 2026

The printed Weekly Edition of the Oakland Post: Week of September 30 – October 6, 2026

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