The Congressional Budget Office (CBO) says that President Barack Obama’s 2016 fiscal budget proposal could dramatically shrink U.S. deficits. To be exact – an estimated $1.232 trillion over the next 10 years as opposed to current tax and spending laws, writes Reuters.
If Congress were to adopt it, the deficit would fall to an estimated $380 billion from $455 billion under current laws. Higher taxes on the wealthy, lower spending on military operations in Afghanistan and net savings from proposed immigration reforms are some of the proposals made by Obama that would decrease the deficit.
Under the analysis from the non-partisan CBO, near term deficits under Obama's proposal would be smaller than those forecast by the White House Office of Management and Budget, while deficits in later years are larger.
The CBO's fiscal 2016 deficit estimate is $94 billion less than the White House $474 billion estimate, a trend that continues through about 2019, when they grow larger in CBO analysis.
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The CBO's estimate for a cumulative deficit of $5.977 trillion from 2016 through 2025 is $303 billion higher than the White House's forecast.
Senate Budget Committee Chairman Mike Enzi (R-WY) was not sold on Obama’s plan just yet, and claims the GOP will be difficult to convince.
“Over the past six years, we have learned that wasteful Washington spending doesn’t solve problems, it only side-steps them,” he said. “By spending responsibly and putting our fiscal books in order in a balanced and responsible way, we can restore the trust that we have broken with the American people.”
He added, “A balanced budget is essential for strong economic growth and job creation….This is not only possible, it is doable and it is what the American people want and deserve.”
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The Republican-controlled budget committees in the House and Senate are expected to release their own proposals next week.
“The fight is over the level of the tax. Obama wants 14 percent of past profits and 19 percent of future profits,” said Daniel J. Mitchell, a senior fellow at the Cato Institute, a conservative. “That's viewed as absurdly greedy, considering that all this income already has been subject to all applicable taxes in the nations where it was earned.”
As is stands, getting approval for Obama’s proposal from the Republican-controlled budget committees in the House and Senate simply does not seem likely despite the potential success it may bring.