On Wednesday, President Obama released his 2014 federal budget. Here are the five things you need to know about the budget proposal:
No. 5: It boosts infrastructure spending, with $50 billion in investments. Most of that money goes into what is being called “Fix It First” repairs to our highways, bridges, airports and other transit systems.
No. 4: It raises taxes on cigarettes and tobacco products. The proposal would make the federal tax on cigarettes increase from 94 cents to $1.95 per pack. The added revenue would go to pre-K education and home visits and care for infants and toddlers.
No. 3: It will reduce the federal deficit by $1.8 trillion. Much of that money comes from cuts to defense, Medicare and other non-health spending cuts. The rest of the deficit reduction comes from No. 2 and No. 1 on our list.
No. 2: The Buffett Rule. Created by the second wealthiest guy in the U.S, Warren Buffett, the Buffett Rule basically says people making more than $1 million shouldn’t pay less in taxes than what a middle-class family pays. The White House says the Buffett Rule would affect less than 2 percent of Americans.
No. 1: Chained CPI. Obama wants to change how inflation is measured for those who get federal benefits like Social Security. He wants to use ‘Chained CPI,’ a different way to calculate inflation that essentially makes the inflation number grow at a slower rate. This is good for reducing our debt but bad for those who rely on federal benefits because it slows the growth of federal payment amounts to Americans. Many of Obama’s fellow Democrats hate the idea while many Republicans are on board with the Chained CPI part of the budget.