President Obama releases FY2011 budget request: Includes asset-building initiatives

 President Obama releases FY2011 budget request:Includes asset-building initiatives
 

On February 1 President Obama released his budget request for FY2011.  In addition to a continued focus on healthcare reform, persistent efforts to strengthen the economy and strategies to decrease the national deficit, the President includes and expands economic opportunity to low- and moderate-income Americans.

The President's FY 2011 budget includes resources for some of CFED's specific asset-building policy priorities for the 111th Congress.

Funding for policies promoting inclusive economic opportunity in the FY2011 Budget:

• Expands the Saver's Credit: Provides a 50 percent match on the first $1,000 of retirement savings for families earning less than $65,000 and provides the deposit directly into the account rather than providing it as a tax credit on federal income tax owed. Click here to learn more about supporting Saver's Credit reform.
• Increases retirement security through the workplace: Proposes requiring employers who do not currently offer a retirement plan to enroll their employees in a direct-deposit IRA account that is compatible to existing direct-deposit payroll systems.Employees may opt-out by signing a written waiver and will retain the right to change their savings levels, reallocate investment portfolios or end contributions to the account.  In addition, the budget doubles the Small Employer Pension Plan Startup Credit from $500 a year to $1,000 per year.
• Extends the Make Work Pay tax credit: Extends the credit for an additional year.  This credit provides $400 to single tax filers and $800 to joint filers.  Self-employed people are also eligible.  This refundable credit has reached 110 million families.
• Expands Financial Aid for Students: Supports legislation that has passed the House and is pending in the Senate that would reform student lending, expand Pell Grants and simplify the student aid system. Launches an American Graduation Initiative to support America's community colleges, focus on college completion, and graduate five million more students by 2020.  The budget also strengthens income-based repayment plans for student loans by reducing monthly payments and shortening the repayment period so that borrowers will pay only 10 percent of their discretionary income in loan repayments and can have their remaining debt forgiven after 20 years.

The budget also proposes to expand the Earned Income Tax Credit, invest in reforming asset limits in Federal means-tested programs, and take steps to reverse the system of upside-down wealth subsidies by revising the mortgage interest deduction, charitable donations and other itemized deductions.
Department of Health and Human Services

• Assets for Independence: $24 million
• Community Services Block Grant: $700 million

Small Business Administration

• Microloans: $25 million
• Microloan TA: $10 million (to be confirmed)
• PRIME: $3.5 million
• Women's Business Centers: $14 million

Department of Agriculture

• Beginning Farmer and Rancher IDA Program: No funding recommended but may be in more detailed Agency budget
• Rural Business Enterprise Grants: $39 million
• Rural Microenterprise Assistance Program: $11.7 million (including mandatory $4 million)
• Intermediary Relending Program: $36 million

Department of Housing and Urban Development

• Family Self-Sufficiency Coordinators: $60 million
• Community Development Block Grant: $3.9 billion

Department of the Treasury

• CDFI Fund: $250 million and $12 million for Native American CDFIs
• VITA Grants: $12 million 

Terminations, Reductions and Savings:
The President's budget proposal institutes a three-year non-security discretionary freeze that will save an estimated $250 billion over the next decade.  The spending freeze places an overall cap on non-security discretionary funding but is not an across the board cut to all programs.  The administration identified more than 120 programs for termination or reduction including Rural Community Facilities, Abstinence Education and Compassion Capital Fund at HHS and the Bank Enterprise Awards program at the CDFI Fund.

Looking Back: FY 2010 Budget

Click here to view President Obama's FY2010 budget request and appropriations.