On Wednesday, April 10, 2013 President Barack Obama released the Administration’s Budget Proposal for Fiscal Year 2014, which begins October 1, 2013.
The Budget proposed total FY 2014 spending, including entitlements, of $3.77 trillion. Of that, $1.058 trillion is in discretionary spending. The Budget cancels out the sequestration cuts which, if included, would have resulted in $966 billion in discretionary spending. Because it eliminates these cuts, in many instances in its Budget documents, the Administration compares its FY14 request to the FY12 enacted level. When it is possible, this report substitutes the FY13 Continuing Resolution funding level. In other instances, the report uses the FY12 level.
Additional tax revenues would be raised by, among other things, adopting the so-called “Buffet Rule,” requiring taxpayers with over $1 million in annual income to pay at least a 30 percent tax rate after charitable deductions. The Budget would also raise $230 billion in revenue by adopting the “chained consumer price index” to calculate increases in Social Security and other program benefits. By eliminating the sequestration cuts, and including additional money for new initiatives, spending in FY14 would increase by $160 billion. Among the new initiatives would be additional money for child care, infrastructure, and teacher rehiring programs.
The President does not attempt to balance the Budget. However, it would reduce the deficit as a percentage of gross domestic product to 1.7 percent by 2023. The deficit projected for FY 2014 is $744 billion, or 4.4 percent of GDP.
The Budget documents outline the Administration’s recommendations for discretionary and mandatory spending, as well as its revenue proposals. Developing a reliable analysis of any budget is difficult. This report provides a California-oriented analysis of the proposal prepared by the staff of the California Institute for Federal Policy Research.