- Created on 10 April 2013
(CNNMoney) -- President Obama on Wednesday will propose a $3.77 trillion budget for 2014 that would cut deficits by $1.8 trillion over the next decade, according to senior administration officials.
Obama's budget blueprint -- which has already drawn criticism from the left and the right -- will offer changes to Medicare and Social Security. It will also include tax increases that would primarily hit high-income households and corporations.
The plan will call for greater spending on infrastructure, early childhood education and nondefense research. Those investments would be paid for by other measures so that they don't add to deficits, officials said.
The president's budget is late this year, coming after the Senate and House have each passed separate and very different 2014 budget frameworks.
While it's not expected to fly on Capitol Hill, Obama's budget nonetheless sets an important marker for continuing debt talks with lawmakers.
Boost infrastructure spending: The president's budget will call for a $50 billion investment to, among other things, repair highways, bridges, transit systems and airports. He would also create a National Infrastructure Bank to bring together public and private capital for important projects.
Change how inflation is measured: Obama has already gotten blasted from the left for supporting a switch to "chained CPI," which is a new way to measure inflation that would reduce projected federal spending by slowing the growth in federal benefits that are annually adjusted for cost of living. Those include Social Security benefits.
His budget, however, will also call for ways to compensate for the change for low-income veterans, recipients of Supplemental Security Income and the oldest Social Security beneficiaries, a senior administration official said.
Chained CPI would also raise more revenue, since many parts of the tax code are adjusted for inflation every year -- including income tax brackets, the standard deduction and contribution limits to 401(k)s.
By 2020, the use of chained CPI could mean an average tax increase of $311 among the nearly 81% of households that would see a tax increase, the Tax Policy Center estimates.
Cap value of itemized deductions: As he has proposed before, the president wants to limit the value of itemized deductions and exclusions for high-income households.
Normally a taxpayer multiplies her top tax rate by the amount of a deduction to calculate the taxes saved. But Obama would cap that rate at 28%, which is below the top two income tax rates. So someone in the 39.6% bracket today would save $39.60 on a $100 deduction. Under Obama's proposal, she would save $28.
Enact a Buffett Rule: Last year, Obama proposed the "Buffett Rule" as a guiding principle for tax reform.
The idea: to make sure that people earning more than $1 million paid their "fair share" of federal tax -- which he defined as a minimum of 30%.
This year, he will include a more concrete version similar to one proposed in a bill last year by Sen. Sheldon Whitehouse, according to a senior official.
The Senate legislation would impose a minimum 30% effective federal tax rate on those with adjusted gross incomes above $1 million, although it phases in for those making between $1 million and $2 million.
Taxpayers subject to the Buffett Rule would still get a break for charitable deductions when calculating what they would owe under the Buffett Rule.
Impose new limit on tax-deferred retirement accounts: Among his new tax measures, Obama would set a limit on the tax-advantaged portion of an individual's savings across IRAs and other tax-preferred retirement accounts.
The account balance threshold would be based on what could finance an annuity of $205,000 a year in retirement. In 2013, that would be $3 million, the administration estimates.
At that threshold, the proposal would affect far less than 1% of IRA and 401(k) account holders, according to estimates from the Employee Benefit Research Institute. Depending on how the threshold is adjusted in future years, however, that percentage could rise significantly.
Raise tax on cigarettes and other tobacco products: To fund expanded access to pre-K education, an idea raised in the State of the Union address, Obama will propose a new federal tax on cigarette and other tobacco products.
It won't be the first time. In 2009, he signed into law a federal tax increase on cigarettes to help pay for an expansion of the State Children's Health Insurance Program, which provides health care for 8 million children.
Raise tax rate on investment fund manager income: Managers of private equity, venture capital and hedge funds are taxed 20% on the portion of their compensation known as carried interest, essentially paying the long-term capital gain rate. Obama wants carried interest to be treated as ordinary income. The result: fund managers could pay a rate as high as 39.6%, or more than 2.5 times the rate they pay now.
Reduce deficits by $1.8 trillion: Obama's debt reduction proposal comes straight from an offer he made to House Speaker John Boehner last year during their fiscal cliff negotiations.
The proposal would replace the automatic budget cuts that went into effect last month.
Close to $600 billion of the $1.8 trillion would come from new revenue -- specifically the cap on itemized deductions and the Buffett Rule.
The other $1.2 trillion would come from spending cuts: $200 billion from defense and nondefense programs on the discretionary side of the budget. Another $400 billion from Medicare and other federal health programs in ways that largely affect hospitals and drug companies. And $600 billion in cuts affecting non-health spending on things like agricultural subsidies and unemployment insurance.
A senior administration official characterized Obama's offer to Boehner, which these measures represent, not as a starting point for talks but a "sticking point," noting that if Republicans can't agree to include revenue as part of any negotiated package "there will be no deal."
It is unlikely the president's proposals will be adopted wholesale. But if they were, his budget would bring total deficit reduction in his tenure to $4.3 trillion.
- Created on 09 April 2013
Legendary rapper L.L. Cool J. and country crooner Brad Paisley have teamed up to create “Accidental Racist,” a song so ridiculous and, well, arguably racist, that social media is questioning if it could possibly be satire.
Released Monday, one day before Paisley’s album “Wheelhouse” hits stores, the track has been raked over the coals and mocked by...
- Created on 08 April 2013
Uganda is proposing a new law that could lead to arrests for those wearing skirts above the knee and would ban "sexy" images, reports the Daily Mail.
The proposed bill would also extend to movies, TV...
- Created on 08 April 2013
Halle Berry and designer Michael Kors have teamed up to tackle the battle against world hunger. Berry and Kors announced the launch of their philanthropic campaign called Watch Hunger Stop.
The campaign will focus on raising money through the sale of Kors' best-selling Runway watch. The watch will sell for $295 and for each sale 100 meals will be donated to children through the U.N. World Food Programme.
The two plan to visit the places where the meals are sent, possibly Africa, Syria or Central America.
"I hope we go while I'm pregnant, so I can talk about prenatal care," said Berry, who recently announced her pregnancy with fiancé Olivier Martinez. "And I will have time off. I'm not working right now."
Berry, already a mother of a 5-year-old daughter, said she wanted to meet and talk with mothers who are struggling to feed themselves and their children while she was expecting. She believes it will help build a connection.
"It's so important to me, being a mom, that I can help educate women on how important it is that when you have a healthy child," said Berry. "It helps set them up for life."
Kors and Berry hope to get 5 million people involved in their effort, either through donations of time or money.
Berry, a supporter of the Jenesse Center, an anti-domestic violence shelter in Los Angeles, plans to expand her charitable efforts, adding that working with the U.N. "is the next evolution in my philanthropic world. It puts my heart and compassion on a global scale."
"The change you saw when people going hungry got a meal — it was an immediate difference," said Kors, a longtime supporter of God's Love We Deliver, a New York-based organization that delivers meals to those in need. "This isn't about research or a big political or social change, this is about giving a meal to people who need them."
Kors noted that "there are very few things in the world that are solvable catastrophes, this is one of them."
- Created on 08 April 2013
The novel "Bombingham" by Anthony Grooms, award-winning author and professor of creative writing at Kennesaw State University, has been selected as the Humanities Council of Washington D.C.'s common reader for the 2013 program year, which begins in May.
"Bombingham" was selected as part of the Council's "Live to Read" program, a celebration of literature and city-wide reading in D.C. The book will be widely recommended reading in classrooms, book clubs and libraries across the city and will be the focal point of book discussions, film screenings, exhibits, read-ins, and classroom programs, all related to the book and its themes. It follows the Council's 2012 selection of Harper Lee's Pulitzer Prize-winning "To Kill a Mockingbird."
"I am surprised and greatly humbled that Washington D.C., our nation's capital, has selected my book, "Bombingham," for this honor," said Grooms. "In this 50th anniversary year of the civil rights movement in Birmingham, Ala., which the book depicts, I hope readers will be inspired to engage in conversations about our nation's continuing struggle to realize equal rights for all."
That is the D.C. Humanities Council's goal as well, says Michael Chambers II, the organization's programs and marketing manager.
"We thought this novel was a good read for the city and a good way for the Humanities Council of Washington, D.C. to publicly commemorate the 50th anniversary of critical civil rights-era events," Chambers said. "'Bombingham,'will be a touchstone for conversations about the bombing of the 16th Street Baptist Church in Birmingham, the March on Washington and President John Kennedy's famous civil rights address in 1963, to name a few — events that changed the course of this country."
Grooms, who began his career as a poet and short-story writer, won the Lillian Smith Book Award in 2002 for "Bombingham," his first novel. The book initially was published in 2001 by Free Press and reprinted in 2002 by One World/Ballantine.
"Bombingham" tells the story of Walter Burke, a black American soldier in Vietnam whose effort to compose a letter to the parents of a fallen comrade evokes the memory of his childhood best friend, Lamar Burrell. The two adolescents experienced growing up in Birmingham in the midst of the civil rights movement and the violence that surrounded it.
Using flashbacks, Walter recalls being swept up with his sister in the movement while their mother lay dying of cancer and their father was descending into alcoholism. Following the lead of Lamar and his activist mother, Walter and his sister joined the struggle for civil rights, secretly attending meetings against their parents' wishes, going to demonstrations led by Martin Luther King Jr., and ultimately facing police dogs and fire hoses. The story juxtaposes the violence and carnage of the Vietnam War with the arbitrary death and violence that occurred during the civil rights movement in Birmingham, including the death of four school-aged girls in a local church.
Prior to the release of "Bombingham," Grooms published a collection of short stories titled "Trouble No More" in 1995, for which he won his first Lillian Smith Book Award in 1996. A collection titled "Ice Poems" was published in 1988. He also is the recipient of the Sokolov Scholarship from the Breadloaf Writing Conference, the Lamar lectureship from Wesleyan College, an Arts Administration Fellowship from the National Endowment for the Arts and a 2006 Fulbright Fellowship for Sweden. Grooms' second novel, "The Vain Conversation" is forth coming from Texas Review Press in spring 2014.
In 1994, Grooms co-founded the Georgia Writers Association with writer Geri Taran and literary agent Susan L. Graham. The Association is now housed in the College of Humanities and Social Sciences at Kennesaw State University.