Reading the Fine Print in President Obama’s Budget

President Obama released his proposed budget for 2016 this week. Among its biggest and most talked-about elements are suggested changes to policies on childcare, taxes, and education. We asked experts in those areas to weigh in on the question: What do you see as the most significant wins, fails, or unanswered questions in President Obama's budget?

Anne-Marie Slaughter is the president and CEO of New America.

The President gets it. He understands the most fundamental point about a “care agenda,” that issues like affordable quality child-care and paid family leave are _not _women’s issues. As he put it in his State of the Union address: “It’s time we stop treating childcare as a side issue, or a women’s issue, and treat it like the national economic priority that it is for all of us.” It’s a national economic priority because women’s participation in the labor force is essential to our productivity and competitiveness as a nation, and for the first time in decades that participation is declining. When childcare costs more than your mortgage, it is cheaper for one parent to stay home – and that parent is still overwhelmingly likely to be the mother. The result could be a decline in the birth rate as couples realize that they now have to choose between children and careers.

Subsidized quality daycare, or better yet, on-site daycare, is a boon to families and businesses alike. Workers who worry less about their children (or equally important, about their aging parents) are more focused, creative, and productive. Their children will also be healthier, happier, and better prepared for school. Stress goes down; wellbeing increases for families as a whole.

This is indeed an economic issue. But equally important, it’s a _human _issue. Not for mothers, but for parents, grandparents, aunts and uncles – anyone who cares about the health and wellbeing of the children in their lives.  Daycare is not just about caring for children. It’s caring about care – the care that loved ones provide for one another. Relegating that fundamental dimension of human existence to a “women’s issue” assumes that families are somehow a women’s preserve, a perspective that is as deeply unfair to men as it is to women. Understanding the centrality and importance of care as a public policy issue builds a foundation for families that is an indispensable foundation for our economy, our society, and our humanity.

Jason Delisle_ _is the director of the Federal Education Budget Project at New America.

The president’s fiscal year 2016 budget out this week is projecting fantastic economic growth over the next decade, but one piece of the puzzle refuses to fit — student loan defaults.

The Department of Education’s budget documents project that 25.3 percent of undergraduate Stafford loans (measured by dollars, not numbers of loans) issued next year will default at some point during the borrower’s repayment term. That is up a full 2.5 percentage points from what the agency projected last year for the previous cohort of loans. And it is a large uptick given that those projections typically don’t move much from year to year.

Every other student loan category also shows an increase in projected default rates. For Parent PLUS loans it is 2 percentage points higher, now at 10.6 percent. On the graduate student side, while the Obama administration seems to be accounting for the fact that many more graduate students will take advantage and reap the benefits of the generous terms of Income-Based Repayment and Public Service Loan Forgiveness, default rates for graduate Stafford and PLUS loans are still projected to increase.

The Obama administration has not explained what is behind these new numbers. Meanwhile, trends that might help explain the projected increase are actually pointing in the other direction. The maximum Pell Grant for low-income students will reach its highest level ever in 2016. Enrollment in affordable repayment plans such as Income-Based Repayment are increasing rapidly as the administration continues to aggressively promote them. Interest rates on loans issued in 2016 will likely be lower than those issued the year before. Even the favorite whipping boy for student loan ills, the for-profit college industry, will take in the smallest share of federal student loans in years, according to the president’s budget.

These comments are excerpted from a piece published this week in Forbes.

Liza Mundy is the director of the Breadwinning and Caregiving Program at New America.

That Obama's work-family vision makes child care front and center, saying that it's neither a side issue nor a woman's issue but rather an economic priority for the nation,  feels new. For the past several years, among work-family advocacy groups, there's been more of an emphasis on the very real need for paid family leave and paid sick leave – that is, measures that enable parents to have the flexibility to stay home with kids – but not so much attention paid to the need for greatly enhanced child care options, to alleviate what is really a crisis in child care. The president's budget allows for both. He talks about paid leave as well – and the budget includes significant measures to encourage states to create paid leave plans – but he really amplified the conversation about childcare. This is really the first time in a long time that I've heard a president or prominent politician talk in such forceful tones about the need for enhanced, affordable child care. I was glad to hear it.

The great unanswered question is how the Republicans will respond, both in the short and long term. It's clear that a basic Democratic work-family plan would include paid family and sick leave policies; more affordable, high-quality child care; tax breaks for child care; universal preschool, etc. The Republicans may not go for this, or not in its entirety, so the question remains: what is their solution? Republicans have several prominent members of Congress who are working mothers--Cathy McMorris Rodgers, Joni Ernst--and they like to showcase these women as a testament to their work-family bona fides. Which is fair enough. But what exactly will the party propose as a conservative work-family plan? What’s their vision for measures that would better enable working families to meet their breadwinning and caregiving responsibilities; to ensure that men and women who choose to do paid work, or to stay home with children, are doing so in an empowered setting where they have real choices?

Reid Cramer is the director of the Assets Building Program at New America.

In President Obama’s telling, his Budget represents a blueprint to bring middle-class economics into the 21^st Century. It is a laudable goal; one that is intended to expanded prosperity beyond the few and create greater economic opportunities for the many. If America is strongest when “everyone gets their fair shot, does their fair share, and plays by the same set of rules,” then we will need to revisit key provisions of the tax code. The first issue is one of basic fairness. Our current tax system has promoted growing wealth and income inequality by favoring unearned over earned income, and allowing a plethora of tax sheltering opportunities available to those already at the top of the economic ladder. President Obama is proposing to raise the tax rate on capital gains so it is closer to the taxes on income for high earners. There are also proposals in the budget to lower the opportunities of tax avoidance through inheritance. These are both good ideas that can increase equity in the tax code.

The second issue is one of efficiency. Are there better tax rules and credits to support achieving the overarching goals of working American families? Sure there are. And the budget includes several constructive proposals. Right now, the Earned Income Tax Credit (EITC) does the heavy lifting in getting money to working families aiming to move up and out of poverty. But it largely misses workers without children and non-custodial parents. President Obama is proposing to double the “childless worker” EITC and open it up to Millennials over the age of 21. It also acknowledges that families with two working adults face additional costs, such as paying for child care and commuting to work. For the first time, President Obama is supporting the creation of a new “second earner” tax credit that can help offset a portion of these costs.

Laura Bornfreund is deputy director for New America's Early Education Initiative.

This year the President proposes an increase of $115 million for IDEA Preschool Grants and Infants and Families programs, which would increase the number of children from birth to age three receiving early screenings and intervention services to approximately 340,000 and which also includes $15 million for a new Pay for Success Initiative. The IDEA Grants for Infants and Families would. The Pay for Success Initiative would sanction states to fund pilot programs that would allow them to determine the best way to expand early screening and intervention services to infants and toddlers who do not qualify for services under IDEA.  These pilot programs would also allow for private and philanthropic investments to expand promising programs via performance-based funding tied to achieving specific outcomes. In other words, investors only get paid if the programs at least meet certain goals. There are currently a few “Pay for Success” (also known as “Social Impact Bonds”) experiments underway. It’s an idea worth further study and exploration, but is this kind of public-private investment a long-term solution for an ongoing need that impacts children during the most malleable stages of development?

The comments are excerpted from a longer piece published this week on EdCentral.org.

Mary Alice McCarthy is a Senior Policy Analyst in the Education Policy Program at New America.

The President’s budget includes additional resources for the public workforce system, particularly in the areas of job training and counseling and for programs targeting the long-term unemployed, disconnected youth, and low-skilled adults. A proposed $500 million of discretionary funds would go to support the provision of more in-person service to the unemployed. It is certainly true that the public workforce system has been woefully underfunded for years, even as demand for its services has increased, making these additional funds sorely needed. But the question looming out there for anyone interested in connecting more people to better jobs is where the good jobs are going to come from. Unemployment is down, but wages are not up. The economy is creating new jobs, but not necessarily good jobs. Other parts of the President’s budget, like the proposed investments in infrastructure and manufacturing, can help generate those jobs. Will Congress let the government drive some actual job creation? If so, will improving better employment and training services make a difference?

The comments are excerpted from a longer piece published this week on EdCentral.org.

Lindsey Tepe is  a policy analyst in the Education Policy Program at New America.

The President’s fiscal year 2016 budget request is a tour de force of what’s big in education policy right now—and comes with a hefty price tag. With several new programs that would be financed through mandatory spending, the next ten years would see $145 billion in new mandatory funds. So what would the American people get for their investment?

Well, $66 billion—a little less than half—would go to the President’s Preschool for All Program, designed to help ensure all four-year-olds have access to high-quality pre-K (as well as full-day kindergarten). Another $90 billion would be allocated to the President’s free community college plan and inflation adjustments for the Pell Grant program. In the primary and secondary education space, the new Teaching for Tomorrow program would allocate just $5 billion over five years to support states and districts willing to make big changes to their human capital recruitment and development models. (If you noticed these numbers don’t add up to $145 billion, the difference is made up with offsets from loan reforms.)

Clearly, the bulk of new mandatory investments hone in on early and postsecondary education. In years past, the Obama Administration has incentivized changes in primary and secondary education through funding competitive Race to the Top Grants. With the bulk of funds they’re asking for this time around dedicated to early learning and higher education, however, it may indicate their priorities are shifting.