With the current U.S. budget a mess of incoherent tax laws and bail-out spending legislation after the government’s near fiscal collapse in 2009, President Obama is planning to change the federal budget. He seeks to increase deficit relief by cutting spending for a number of public welfare programs, the most obvious target being Social Security.
Social Security: the problem and the solution
Social Security has been an issue at the front of politicians’ minds since the economic crash. It rapidly became a resource that was declining so rapidly that many believed the younger generation would never see the benefits that they were paying in, every pay period. Obama’s new budget plans to tackle the problem of Social Security, at least in a small way, by reducing the payout to the elderly by less than $1,000 a year in the highest age bracket, less for younger recipients.
According to an article at Huffington Post, his proposal will affect almost all social welfare programs, essentially refining the system to work more perfectly within its parameters. This means that wealthier patients currently receiving Medicare will pay more, to make it possible for less wealthy patients to continue to receive the care they need.
Here are some specific budget changes and what to look for:
1. Losses in general assistance welfare program
Some of Obama’s cuts include reductions in payments for people who are currently receiving welfare checks but do not have any minor children in their care. A number of exceptions exist, namely for the disabled or new parents; for example, if you are blind, you will continue to receive monthly checks.
Pregnant women who need to care for their unborn children, and young mothers who have not yet registered their children for welfare benefits should inform the government that they require assistance in order to continue to receive their checks.
2. Raising taxes
Despite claiming that he would not raise taxes for the middle class, Obama proposes to raise tax brackets that would put many middle-class payers in a higher bracket, which means many will have to pay higher income taxes.
3. Tax caps for the wealthy
In order to tax the wealthy more equitably, Obama is putting a 28% cap on tax deductions, forcing the wealthy to pay more on the millions or billions of dollars that is is in their bank accounts. This would also more appropriately tax retirement plans with a tax-preferred status that are currently going untaxed and often contain millions of dollars that remain essentially untouched due to their classification as retirement accounts.