Obama Proposal Combines High-Stakes Poker on Federal Budget, Important Proposals for Low-Income People

April 12, 2013

By Elizabeth Lower-Basch

April 12, 2013

The budget President Obama released this week was not the typical Administration budget.  Usually, the President's budget is a statement of his vision for the country and his priorities for spending.   It traditionally comes before the House and Senate budget resolutions and lays out the agenda that he thinks Congress should follow.

The Administration's budget this year comes after the House and Senate have already passed their widely different budget resolutions and includes provisions that the President acknowledges are only "second-best" solutions to the problems our nation faces.  The budget includes the final offer President Obama made several months ago in budget negotiations.  It calls House Republican's bluff, challenging them to agree to revenue increases now that he has put cuts to Social Security and Medicare on the table.   Based on the initial responses, it appears that the deadlock is likely to continue, at least until the next action-forcing deadline is reached this summer when Congress will need to raise the debt ceiling to match the spending that it has already approved.

Sure, this budget is one bid in a high stakes poker game.  We worry about who is going to call whose bluff and we may not be thrilled by the cards we draw.  However, we should not let the poker politics obscure the many important proposals in the President's budget.    These include:

  • Critical new investments in early childhood programs to promote universal access to pre-school and ensure that all young children can succeed in school and life. This includes $75 billion in mandatory funding across 10 years to support state preschool programs. $1.3 billion of the $75 billion would be allocated in FY 2014. Additionally, $750 million in discretionary funding would be available in FY 2014 as development grants to states to create or strengthen their early education systems in preparation for the Preschool for All initiative. The expanded preschool access would be paid for through increased tobacco taxes, also included in the President's budget. Additionally, the budget proposes using $15 billion of tobacco taxes over 10 years to expand home visiting programs. Finally, to increase access to comprehensive, high-quality child care for infants and toddlers, the President is proposing $1.4 billion to support Early Head Start-Child Care Partnerships.
  • A recognition that we need targeted investments in jobs to bring down unemployment and ensure that disadvantaged workers and communities are not left behind. The budget calls for immediate spending on infrastructure and a $12.5 billion investment in Pathways Back to Work, including subsidized employment opportunities for adults and youth. The President also repeated his call from the State of the Union to raise the minimum wage to $9 an hour.
  • An understanding of the nation's responsibility to help high-poverty communities rebuild. The budget calls for the creation of Promise Zones that will be strengthened by improving affordable housing, expanding educational opportunities, reducing violence, and providing tax incentives for hiring workers who live within the community. The Promise Neighborhoods and Choice Neighborhoods initiatives are greatly expanded to provide a $700 million investment, while the Byrne Criminal Justice Innovation grants will invest $35 million to reduce crime and violence.
  • Preserving student aid for low-income students and supporting innovative educational models that connect student to good jobs. The budget proposes increasing the maximum Pell Grant award to $5,785 and taking steps to fully fund the Pell program. To increase affordability and quality in higher education through state policy reform, the President's budget proposes a new $1 billion Race to the Top fund. Two new competitive grant programs would also support innovative education and training models that help prepare individuals at all skill levels for jobs in high-demand sectors. These include $8 billion for a Community College to Career Fund that would support training programs closely connected to local labor market needs and $42 million for a dual enrollment demonstration project for both high school and adult students.
  • A commitment to ensuring that the safety net is there for those who need it, including fully implementing the Affordable Care Act, making permanent the improvements to the Earned Income Tax Credit, Child Tax Credit, and American Opportunity Tax Credit that were only temporarily extended through 2017 by the fiscal cliff deal, and averting a cut to Supplemental Nutrition Assistance Program benefits that is scheduled to take effect this fall. Means-tested programs are also not affected by the proposed changes to how inflation adjustments are made to Social Security.

Importantly, the President's budget shows that it is possible to make critical investments in American workers and families while also reducing budget deficits.  It shows the falsity of the claims that fiscal prudence requires deep cuts to the programs that serve the most vulnerable Americans.

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