Capitol Report: Winners and losers in President Obama’s new budget
WASHINGTON (MarketWatch) — If you’re in the construction industry or pay for child care, there’s lots to like in President Barack Obama’s fiscal 2016 budget proposal. But if you’re a couple making $ 500,000 a year or rely on agricultural grants — not so much.
Also read: Obama seeks to raise $ 1.4 trillion in new taxes over a decade.
Obama’s nearly $ 4 trillion budget proposal, sent to Congress on Monday, draws battle lines over spending and taxes with the Republican-led Congress as the president’s popularity is creeping up and the deficit is on track for another Obama-era low. On the domestic side, at least, Congress is likely to reject much of what Obama is offering. But the proposal represents Obama’s agenda for the year and would create a number of winners and losers across the U.S. economy. Here are some of each:
The construction industry: A clear winner from Obama’s budget proposal would be the construction industry, since the president is proposing a $ 478 billion increase in funding for rebuilding U.S. roads and bridges. Obama thinks he can get the GOP on board with this: “Republicans believe that we should be rebuilding our infrastructure,” he said in a pre-Super Bowl interview on Sunday night. But some Republicans have already expressed skepticism about Obama’s proposal to pay for it, in part, with a one-time tax on foreign earnings.
Research and development: Overall, the budget provides a 5.5% increase for research and development, spread across multiple areas like energy, biomedical research and the environment. It would also make the research and experimentation tax credit permanent.
Parents: Obama is seeking to increase the child and dependent care tax credit. The maximum credit is now $ 1,000 per child. The budget triples the maximum credit for families with children under age 5, and also expands it to families with incomes of up to $ 120,000. The administration says the tax change would benefit 5.1 million families.
Wealthy couples: If you and your spouse make more than $ 500,000 a year, Obama wants to increase your capital gains taxes. The budget proposes to pay for middle-class tax breaks and education investments by, among other things, raising the capital gains rate for that income level. The rate would go from 23.8% to 28%.
Agriculture programs: Obama’s budget trims a number of grants administered by the U.S. Department of Agriculture, including a health-care services grant, certain housing grants from the agency and money for animal-health and alternative-crop research. Also on the chopping block: $ 1 million for potato breeding research.
Health IT research: Health and Human Services funding falls slightly in the budget, with reductions for health information-technology research, and community development block grants. The grants fund affordable housing and anti-poverty programs.
Here is a look at how Obama’s spending proposals break down, by agency. First, some of the increases:
|Agency||FY 2016 request||FY 2015 enacted||Increase|
|Commerce||$ 9.8 billion||$ 8.8 billion||11%|
|Education||$ 70.7 billion||$ 67.1 billion||5.4%|
|Energy||$ 29.9 billion||$ 27.3 billion||9.5%|
|Transportation||$ 14.3 billion||$ 13.8 billion||3.6%|
Funding for these agencies, however, falls in the proposal.
|Agency||FY 2016 request||FY 2015 enacted||Decrease|
|Agriculture||$ 23.5 billion||$ 23.8 billion||1.2%|
|Health and Human Services||$ 79.9 billion||$ 80.2 billion||0.4%|
|Justice||$ 14.9 billion||$ 27.3 billion||45%|