President Obama Sends 2017 Budget To Congress


Time: 6:21 p.m. CEST  Update: 11: 59 p.m. CEST

The White House reacted to decision of the House Budget Committee not to invite President Barack Obama’s budget director, Shaun Donovan to presents the budget before their panels. During the Tuesday briefing with correspondents together with officials from the Council of Economic Advisers, White House press secretary Josh Earnest said, “Budgets enumerates the priorities and when you have something that is this detailed there.”

Earnest said that on many of the issues Republicans would not agree, but “there are several areas where there should be a bipartisan agreement. One good example is cyber security. There is a robust proposal in here,” said Earnest. But, Earnest commented the Congress and that is “unfortunate that Republicans in the Budget Committee won’t even have a conversation with us about it.”

On Tuesday, instead of the usual press briefing with the correspondents, the White House press secretary Josh Earnest participated in the debate with senior officials to explain the President’s budget for fiscal year 2017. During the more than one-hour presentation, Earnest said that the budget solves the issues of those families living with less than $2 a day in cash. “There are a significant number of families, including as many as three million kids, who live on less than $2 a day in cash. There is a proposal in this budget to work with states and address urgent needs to make sure they have support to get back into the workforce.”

Significant time of the Tuesday’s presentation was the comments of the Director of the Office Management and Budget Shaun Donovan, who explained that they introduced 117 different cuts, consolidations, or saving proposals in the budget. “We’ve talked a little bit about health care savings — about $375 billion there.  But we’ve got 15 different proposals that save over $100 billion on program integrity,” Donovan explained.

He said that, “we are able to stabilize debt and “actually bring it down over the 10-year window — is because we continue to propose comprehensive business tax reform that would offset the cost of the tax reform — the tax extenders that were done at the end of last year.”

The fiscal year 2017 budget considers immigration reform, as “Those workers contribute to society.  They pay taxes.  They boost our economy, “ Donovan said. He explained that, “the Congressional Budget Office says the same thing.  Their projections are that we would save $170 billion in this decade.  We’ve adopted those numbers in the budget.  And that savings grows; it becomes almost $1 trillion when you add in the second decade.  So immigration reform is not just the right thing to do for families and our economy, it’s the right thing to do for our fiscal future.”

But, the way the budget is structured is not addressing only the social issue, but as well introduces “notable change in the forecast.” Jason Furman, from the Council of the Economic Advisers, said, “The other notable change in the forecast is a reduction in project interest rates with a 10-year Treasury note expected to eventually settle at 4.2 percent.  This projection is slightly more conservative than the CBO and Blue Chip interest rate projections.  These lower expected interest rates also have important implications for broader macroeconomic and fiscal questions.”

For Furman, it is important that the deficit remains below three percent of GDP, and that in a period of 25 years, “the deficit is actually shrinking as a share of GDP.”

Jeff Zients, director of the National Economic Council explained a $10-a-barrel fee on oil, paid by oil companies. “Upgrading our infrastructure helps businesses move goods faster to market, and this proposal is fully paid for by a $10-a-barrel fee on oil, paid for by oil companies, that would support hundreds of thousands of good, American jobs, and helps the environment by reducing carbon pollution,” Zients said.

According to Zients, “the President’s budget doubles clean energy research and development — it calls for a $7.7 billion investment in early-stage R&D on clean energy.  That’s a 20 percent increase.  And this will keep us at the vanguard of the clean energy revolution.”

President Barack Obama sent his last budget proposal to the Congress, where Republicans dominate. Obama, as the New York Times reports, seeks $19 billion for a broad new cybersecurity initiative. The centerpiece proposal is the cybersecurity initiative, which should gain bipartisan support. Obama’s $19 billion cybersecurity request reflects a 35 percent increase — $5 billion — above current spending.

The Times explains that a $3,1 “billion proposal to overhaul the federal government’s aging computer systems, was prompted by a huge embarrassment, the successful Chinese theft of security records on 22 million Americans from the system run by the Office of Personnel Management. The attackers were in the system for more than a year, undetected. They shipped the data out of the federal systems almost daily, also without being noticed.”

About half of the $1.2 billion in discretionary spending are for the domestic programs and half is for the military. Obama requests about $300 billion for infrastructure improvements and innovations for green-energy vehicles, paid possibly with the oil fee.

The budget for the fiscal year, which starts on October 1 has projections on $4 trillion, although as the Times writes, only about one-quarter is the so-called discretionary spending for domestic and military programs. The much of the budget is for mandatory spending, chiefly interest on the federal debt and the Social Security, Medicare and Medicaid. As the Times reports, the deficit would increase in fiscal year 2017 to $616 billion from $503 billion last year.

The President’s budget proposal includes a $10-a-barrel fee on oil, the Times said, on which Republicans disagree.

The chairman of the House Budget Committee, Representative Tom Price of Georgia announced that they would not invite Mr. Obama’s budget director, Shaun Donovan, to testify before their panels, which reflects hostility toward Obama and discontinue the modern budget process dated of 1975, the Times says.

Senate Democrats protested the decision and those in the Senate Budget Committee, “led by Senator Bernie Sanders of Vermont, the presidential candidate, recalled that even in February 2004, when a ricin scare shuttered Senate offices, the budget committee borrowed House space to hear from President George W. Bush’s budget director,” David Sanger writes in the Times from Washington D.C.

Original reporting and writing: David Sanger/New York Times

White House briefing: Aleksandra Dukovska via livestream: Senior Administration Officials discuss the President’s budget FY2017

Related Readings: The President’s Fiscal Year 2017 Budget: Overview meeting our greatest challenges

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