President Obama is introducing a $3.99 trillion federal budget Monday for fiscal 2016 that would eliminate what the White House called the “mindless austerity” of sequestration cuts and would raise taxes on capital gains and corporations doing business overseas.
The president’s budget would increase discretionary spending by more than 6 percent, adding or expanding a variety of programs such as early childhood education and tax credits for middle-class families. To pay for those initiatives, Mr. Obama would borrow $474 billion more than the Treasury expects to collect in taxes in fiscal 2016, which begins Oct. 1.
Taxes would rise along with spending under the president’s plan, which faces strong opposition in the Republican-led Congress.
Senior administration officials said Sunday that Mr. Obama would impose a one-time “transition tax” of 14 percent on corporations’ overseas profits to raise $238 billion for infrastructure improvements. That new revenue would augment the federal highway trust fund to pay for a six-year, $478 billion reauthorization of the surface transportation program — an increase of about 33 percent over the current highway plan.
The president is also calling for a 75-percent increase in spending on mass transit.
In addition to the new tax on corporations’ foreign profits, Mr. Obama is proposing to raise capital gains taxes and close tax loopholes on trust funds for wealthier families. The White House said previously that those tax-hike proposals would bring in about $330 billion over 10 years.
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The president announced last week that he wants to do away with “sequestration” budget caps that went into effect in January 2013 under an agreement made earlier by Mr. Obama and congressional leaders. His new spending plan would increase non-defense discretionary spending from $493 billion to $530 billion.
The budget also calls for raising defense discretionary spending from $523 billion to $561 billion, to pay for priorities ranging from the fight against the Islamic State terrorist group to efforts to counter Russia’s military aggression in Ukraine. Some Republican lawmakers are anxious to abolish spending caps on the Pentagon.
“We’ve seen bipartisan agreement that the sequestration is mindless,” a senior administration official said.
• Dave Boyer can be reached at dboyer@washingtontimes.com.
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