WASHINGTON – President Barack Obama’s proposed 2015 budget would increase taxes by $1.4 trillion over the next decade compared with current law, the budget agency said Thursday.
In a fresh analysis of the White House budget plan for the fiscal year starting Oct. 1, the Congressional Budget Office said the proposal would result in a $446 billion spending increase for the 10 years ending in 2024.
The agency projected that under the plan, the U.S. budget deficit would increase over a three-year period and then decline from 2017-2024, when compared with spending forecast under current law. The deficit would rise about $1 trillion less over 10 years than under current law, CBO projected. Spending would outstrip revenue by about $500 billion from 2014-2015 and rise to $700 billion to $800 billion by 2024.
There’s little chance of Congress adopting Obama’s budget plan this year, as the House, Senate and Obama have already agreed to a deal on top-line spending for the next fiscal year. House Republicans adopted their own plan that cuts spending further, eschews tax increases and attempts to balance the budget in 10 years.
Obama’s proposed budget includes several measures Congress is considering separately, such as a revision of U.S. immigration law similar to a bill the Senate passed last year.
That measure, S. 744, would increase the size of the legal labor force, “boosting tax receipts and direct spending for federal benefit programs.” It’s estimated to increase revenue by $456 billion while increasing spending by $298 billion. House Republican leaders have said they won’t take up the Senate immigration bill.
Obama proposes spending increases of $433 billion over 10 years in the so-called discretionary portion of the budget, such as education, clean energy programs or public works. Discretionary spending accounts for about 30 percent of the federal budget. The remainder is for mandatory spending, such as Social Security, Medicare, Medicaid and interest on the U.S. debt.
Among the largest tax changes in the president’s budget plan would be limits on deductions and exclusions for some high-income filers. Obama’s budget would limit the value of itemized deductions and other tax breaks to 28 percent for the highest U.S. earners, raising $498 billion over 10 years.
Taxing estates exceeding $3.5 million at 45 percent and lifetime gifts exceeding $1 million would raise about $96 billion over 10 years. A fee on U.S. financial institutions at 0.17 percent of covered liabilities would raise $48 billion.