The budget would raise an extra $1.5 trillion in revenues by increasing taxes on the top 1% – 2%. It contains most of the $350 billion of immediate fiscal stimulus that was contained in the American Jobs Act. The budget would also prepare the country for long-term deficit reduction—for every $1 of increased revenue there are $2.50 in spending cuts—and would eliminate oil and gas subsidies, replacing them with subsidies for manufacturing.
What’s most exciting about the budget is infrastructure spending. It’s fashionable to talk about the “crumbling” of American global influence, but what is literally crumbling is our infrastructure. Here in Michigan, 13% of bridges are “structurally deficient,” and there isn’t too much money to fix them up. Where our infrastructure really lags behind other developed nations is in public transit. Unless you live in a big city, it’s difficult to get around the U.S. without a car; our rail system lags far behind other developed nations.
Infrastructure doesn’t just create jobs for construction workers and engineers. A well-connected United States with efficient, technologically advanced infrastructure will improve commerce and persuade businesses to locate in the U.S. as opposed to abroad. South Africa, for example, knows that their mining sector could be doing more if there was better transit to move around labor and capital, which is why President Jacob Zuma announced a $40 billion “infrastructure development drive” last week.
This is why Obama’s budget contains a six year $476 billion plan to improve our country’s faltering infrastructure. You can find details of the plan here. Essentially it would build a lot of higher speed rail and improve roads, bridges, runways, border crossings and water systems. The budget would also establish the National Infrastructure Bank, an independent body of finance and infrastructure experts that would issue loans to private large-scale water, energy and transit projects.
This is the big infrastructure plan Obama hinted at in his sate of the union address, when he called on Congress to put the savings from getting out of Iraq and Afghanistan towards improving our infrastructure (a re-allocation of funds the budget specifically notes).
The vast majority of this budget, however, will never pass. It’s already been called “dead on arrival” by Senate minority leader Mitch McConnell, who also called it merely a “campaign document.” It is a campaign document, one that provides a sharp contrast to the Republican budget hawks’ non-vision for our economy. If explained well, this is a document Obama can run on.
By: Mike Guisinger
(Photo by Justin Sloan under a Creative Commons license)