TPA Responds to President Obama's FY2016 Budget Proposal

TPA Slams President Obama’s FY 2016 Budget
Budget request offers no spending restraints and is harmful to taxpayers

Alexandria, VA  – Today, President Obama released his Fiscal Year (FY) 2016 budget. Unfortunately, this budget will harm taxpayers and do more damage to the country’s national debt. Just like Punxsutawney Phil saw his shadow and predicted 6 more weeks of winter, taxpayers will see many more years of deficit spending with the President’s budget. The bad news is that there are projected spending increases in both discretionary and mandatory accounts.

“The FY 2016 budget request from President Obama offers nothing in the way of spending restraint at a time when our debt is $18 trillion and climbing. In fact it does the opposite by adding $3 trillion to the national debt between 2016 and 2020. As working families continue to make hard financial choices that are necessary to everyday Americans, the President is looking to ask those same working families to send more money to Washington and undo the spending limits he and Congress put in place only a few years ago,” said David Williams, President of the Taxpayers Protection Alliance.

Mandatory spending (including interest on the debt) is expected to increase 8.7 percent over FY 2015 from $2.594 trillion to $2.2820 trillion. Going beyond 2016 those figures continue to increase at a rate of 5.3 percent in 2017, 5.8 percent in 2018, 8.5 percent in 2019, and 6.9 percent in 2020. The total increase in mandatory spending is 40.4 percent increase from 2015 to 2020.

Discretionary spending also increases under the FY2016 budget. Even though there is a slight decrease in 2016, the next four years of spending project increases total slightly more than 3 percent. Discretionary spending shouldn’t be increasing, it should be decreasing and that metric alone disqualifies this budget proposal immediately upon review.

In particular, the proposal includes $478 billion worth of infrastructure spending that will be funded in part by raising taxes on American businesses by hitting them with a 14 percent tax on profits made overseas. This is the seventh budget proposal from the Obama White House, and all seven have included tax increases. The FY2016 budget proposal from President Obama seeks to raise taxes on carried interest, capital gains and trust funds. These types of budget gimmicks are in direct contrast to the real type of corporate tax reform needed that will not only bring money back to America, but jobs too.

The President’s tax increases go beyond businesses and will also hit consumers. Once again the White House is seeking to raise tobacco taxes, which would disproportionately hit middle class workers at an estimated $95 billion over the next ten years.

The Pentagon budget includes a base request of $534 billion, the largest base budget ever requested; and an additional $51 billion for the Overseas Contingency Operations (OCO) account that perpetuates what has essentially become a slush fund for pet projects and waste. This budget will also provide $7.4 billion for green energy interests like wind and solar that is only kept afloat by taxpayer money while consumers fail to see savings materialize. These spending figures would smash the spending caps established by the Budget Control Act of 2011.

The President is also looking to perpetuate problems with some of the most dysfunctional programs the federal government operates. The worst example is his proposal to move more money into the Social Security Disability Insurance (SSDI) program. This program has been wrought with waste, fraud, and abuse well documented by comprehensive reports from Congress, including the office of former Senator Tom Coburn.

The FY2016 budget has mandatory cuts of close to $11 billion and discretionary cuts that total $3.6 billion. These cuts include consolidation and savings but the overall total of $14 billion for FY2016.  Considering that the projected deficit for 2016 is to exceed $535 billion, $3.6 billion is only a drop in the bucket.

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