Summary of the President’s FY 2015 Budget Proposal

Jeff Hurley 3/5/2014

The Office of Management and Budget released President Obama’s FY 2015 budget proposal on March 4. Beginning in 1921, the president has been required by law to submit a consolidated federal budget before Congress, with estimates on spending, revenue, information on the performance of the economy and legislative and policy recommendations. Typically released at the beginning of February, this year’s budget was delayed becauseof the uncertainty of federal budget and appropriations agreements passed in recent months.

Presidents FY 2015 BudgetThe FY 2015 budget plan totals $3.9 trillion in outlays, a $250 billion increase over current estimates for FY 2014. While the president abides by the $1.014 billion discretionary spending limit set in December’s Bipartisan Budget Act, he also proposes additional spending split between Defense and non-Defense programs. The “Opportunity, Growth and Security Initiative” would provide $56 billion in additional funding for early childhood and K-12 education, energy efficiency grants, job-training services and public safety and justice assistance grants. This would be offset by spending reforms, such as the reallocation of broadcast spectrum and reforming federal crop insurance subsidies, and by savings from reducing tax benefits for multi-million dollar retirement accounts.

The president’s budget recommendation marks one of the first steps in the FY 2015 budget process. House Budget Committee Chairman Paul Ryan will unveil his fiscal vision later this month. The House budget resolution is expected to focus on welfare reform and propose entitlement reform. Senate Budget Committee Chairwoman Patty Murray, on the other hand, has already stated the Senate will not introduce a budget resolution, citing one isn’t needed as Congress already approved a discretionary spending cap late last year.

Other select highlights of the budget plan include:

  • Proposing to solve the funding and financing crises currently facing federal surface transportation programs. It would dedicate $150 billion in one-time transition revenue from business tax reform to fully fund a new Transportation Trust Fund as well as provide additional funding to other programs and goals associated with surface transportation.
  • Expanding the Earned Income Tax Credit (EITC) by doubling the maximum credit and making the credit available to  both higher-income workers and for younger adult workers.
  • Reducing funding for the Low-Income Home Energy Assistance Program (LIHEAP) by $674 million, a decrease of almost 20 percent.
  • Increasing the cigarette tax from $1.01 per pack to about $1.95 per pack and increase all other excise taxes on tobacco products, cigarette papers and tubes by approximately the same proportion beginning in 2015.
  • Creating the Now is the Time initiative, which would expand mental health treatment and prevention services across the Substance Abuse and Mental Health Services Administration and the Centers for Disease Control Prevention (CDC).
  • Eliminating funding for the State Criminal Alien Assistance Program (SCAAP), a program that received $180 million in federal funds in FY 2014.
  • Establishing a new initiative called Race to the Top-Equity and Opportunity (RTT-Opportunity), which would create incentives for states and school districts to identify and close opportunity and achievement gaps. Grantees would enhance data systems to sharpen the focus on the greatest disparities, and invest in strong teachers and leaders in high-need schools and also support other strategies to mitigate the effects of concentrated poverty, such as expanded learning time, access to rigorous coursework, and comprehensive student supports. 
  • Creating a new initiative, ConnectEDucators, focused on leveraging technology in the classroom that would provide formula-based State Leadership Grants to help enhance state and local capacity to support the transition to digital learning.  It would also include three-year grants for districts to support the implementation of comprehensive plans to ensure that educators have the skills and supports needed to improve student access to high quality instruction. 
  • Establishing reforms in wildfire suppression costs by creating an emergency dedicated source of funding outside of discretionary budget caps for USDA and Interior’s wild land fire suppression. This would allow the existing wildfire funds to be used for prevention purposes.
  • Creating a $1 billion Climate Resilience Fund to aid communities in disaster relief, droughts, and other effects caused by climate change.

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