1. WHAT ITEMS DOMINATE THE BUDGET?
Employment and Job creation
The president’s speech featured employment as a major concern for the government. This is because it is the major macroeconomic indicators for economic growth and development of the country. The President expressed disappointment due to the manufacturing companies’ intention to hire workers from abroad. To avert the situation, he said that the key impediment to job creation is the stiff tax regime that has deterred potential investors from investing their capital in the country. He said that the proposal on tax reforms, which he had proposed to the budget committee, had been included in the budget for debate. He expressed confidence that proposals in the budget will reduce unemployment.
Research, technology and innovation
The President indicated that it was necessary to invest funds for research to enhance innovation in the technological and other economic pillars to supplement the objective of job creation. He said that the government had invested in establishing four high-tech manufacturing hubs by linking businesses with research universities to lead in efforts to advance in technology. The government will provide funds to five extra institutions to strengthen their commitment to establish at least 45 such hubs in the next 10 years.
Environmental pollution and green energy
The president understood right that a country cannot survive in a polluted environment. He indicated that the government had proposed funds to facilitate production of natural gas and generation of electricity using fuels. Further, the budget had reserved incentives to facilitate this objective. The president indicated that through his directive to the administration to liaise with states to draft new standards to oversee the regulation of carbon emission will yield positively.
The president directive on pollution management affirms his understanding that despite creating job opportunities for the people, they cannot be productive without clean environment,
Quality Education
Another key element in the budget is the investment in affordable and high-quality education to every US Citizen. The budget proposes funding infant and toddler care to approximately 100000 children. To ensure high quality education and enhance accessibility of information to young children, the government, through the President directive had entered into an agreement with Federal Communications Commission (FCC) to ensure that 99% of students were able to access unlimited high speed broadband within a period of four years. The presidents exuded confidence in achieving the objective by noting that FCC had made connected more than 15000 schools. To subsidize the program, the budget estimates propose to cater for training expenses for teachers in on the country.
Through his speech, President Obama noted that he had directed the department of education to facilitate linkage of high schools with colleges and employers to enable them gain knowledge invest their knowledge in relevant courses to gain skills that conform to the job demands. In addition, students will receive grants, which they will repay at 10% of their income. With this initiative, education would be accessible to all citizens.
Wage rate
Health care system
Another key pillar to economic development of any country is health care for all citizens. If citizens are vulnerable to epidemics, children and their parents will die or become weak, thus resulting in a deficiency of skilled workers and low quality production. The president indicated that the budget had estimated funds to cater for the implementation of the Affordable care Act. The Act was formulated to enhance affordability of quality health care for all. More than 3million people under the age of 26 had been insured under their parents or guardians while over 9million people had medical insurance cover. The government had subsidized access health care by reducing prescription costs, retaining medical premium rates and expanding the eligibility age period to access medical finances.
Government’s efficiency in service delivery and Information accessibility
The President expressed commitment of the government to invest in improving service delivery to the people. The budget had proposed to set funds to facilitate provision of government data to the people through online channels and enable innovation and job creation
Security
Security is one of the social aspects that guarantee sustainability of all development goals that have been achieved in a certain country and the world at large. The budget will facilitate the continued effort to help Afghanistan, Syria and other nations stabilize. This was the fulfillment of the government’s commitment to enhance security both externally and internally. In addition, the government will continue equipping its military forces and improving their social welfare in and out of service.
Immigration policy
The presidents shared the same sentiments with the private enterprises and business sector about the escalating effects brought about by the broken immigration system. He said that urgent reforms in the immigration system were necessary, and thus would reduce the budget deficit by approximately $1million in the next 20 years.
2. WHY IS THE BUDGET PRIORITIES AS THEY ARE?
For a country’s economy to succeed in economic growth and development, the key macroeconomic policies have to be prioritized. If these pillars do not perform efficiently, the economy is unlikely to prosper. These pillars include full employment, price stability, economic growth and balance of payment. The budgetary committee realized that these pillars had to be supplemented by other indirect factors that include wage stability, quality education, health care and national security. This strategy is a successive process where one factor plays a role on how the other factor will perform.
Job creation will increase people’s income and boost their purchasing power of goods and services. Consequently, consumers invest in productive sectors that boost their income and increase the government’s revenue through tax deductions. Moreover, increase in household income will enable parents to invest in their children’s education thus improving the country’s literacy level and skill development. The government is obliged to harmonize wage rate to enhance equality among workers and motivate college learners to invest their skills in manufacturing and other service provision sectors.
Boosting the country production capacity and increasing employment may not survive for long if the health care of the country’s citizens is deteriorated. It is the government’s responsibility to ensure that people have access to affordable and quality health care. Improved health care will reduce the death rate thus maintaining the country’s workforce and skills. Finally, social and political instability is the greatest impediment to the country’s development. The government prioritizes the country’s internal and external security to create an enabling environment for its citizens. Moreover, it will attract investors whose contribution increases a country’s revenue to enable quality delivery of public goods and services to its people.
3. WHY THE DEFICIT?
The main reason the budget is experiencing a deficit is due to overstretched expenses to the society. One of the major factors that contribute to the deficit is the social welfare of maintaining retirees through provision of pension benefits and upkeep money. The ratio of able workers to retirees continues to increase with skilled workers population shifting to retirees section. In addition, broken immigration policy has also contributed to the deficit. Strict rules on immigrants have contributed immensely to a reduction in country’s revenue. Potential workers and investors from other countries that would have injected their income to the country’s economy have been deterred by the country’s tough restriction rules. Another challenge is maintenance of affordable health care to the country’s citizens. This occurs as a result of increasing population and increased cost in healthcare services. This has overstretched the budget estimates to an extreme level. Another contributing factor is the uncertainty in the international market which may prompt the government to seek funds outside the budget estimates to cater for the eventuality.
Finally, instability in wage rate is subject to the budget deficit .This is because many workers keep demanding higher wages, which results in the budget deficit.
4. WHAT WOULD YOU CUT, DROP, ADD, OR CHANGE?
First, I would overhaul the immigration policy to create an enabling environment for the immigrants. I would reduce legal restrictions imposed on immigrants from other countries to enable them enter the country at ease. In addition, I would reduce interest rates charged on foreign investors to attract them to invest in our country. This would boost our national income reduce the budget deficit.
In addition, I would introduce a policy to revise and harmonize the wage rates for all workers. This will cushion the government against frequent adjustments from employees and as well boost their motivation to work. I would also introduce a policy that would require every citizen to open accounts for savings. Doing so will reduce the government burden to offer humanitarian services since the savings can be used for precautionary measures.
Finally, I would review on the procedures followed in the government engagement, in military assistance to other countries. This international engagement has adversely affected the budget allocation. I would propose a partial fund allocation to accommodate other willing countries to participate through their military and humanitarian assistance.
5. HOW WOULD YOU BALANCE THE BUDGET?
References
The Whitehouse (2014). The Budget Message of the president. Retrieved from The Whitehouse website: http://www.whitehouse.gov/omb/budget/Overview
