President Lays Out Final Budget Plan

February 9, 2016

On Tuesday, February 9, 2016, President Obama released his Fiscal Year 2017 budget proposal, which would spend $4.1 trillion while increasing taxes by $3.4 trillion next fiscal year.  At this rate of spending, the budget projects adding $6.1 trillion to the deficit over the next 10 years, increasing the debt to $24.8 trillion.

 

While the budget blueprint was viewed as dead-on-arrival on Capitol Hill, it contained insights into the President’s priorities and possible executive action for the final stretch of his administration.  In particular, the Treasury Department funding included $10 million for the Small-Dollar Loan Program authorized by the Dodd-Frank Act.  The program funding, which was recently requested by Senate Banking Committee Ranking Member Sherrod Brown (D-OH), is meant to provide low-income borrowers access to affordable financial products and provide an alternative to predatory lending by encouraging Community Development Financial Institutions to establish small-dollar loan programs. 

 

CBA President and CEO Richard Hunt responded to the small-dollar proposal and pointed to regulatory action that forced out deposit advance products, saying, “Our own government, namely the OCC and FDIC, essentially eliminated a very popular bank product which helped many of these working families make ends meet.”  In addition, the Treasury’s budget identified a second effort to expand financial product offerings with the creation of a $100 million innovation fund to encourage the development of private-sector financial products and services that would help low- to moderate-income workers build up “rainy day” reserves.

 

Further, the White House placed cybersecurity as a high priority in its budget outline.  Specifically, it provided a 35 percent increase in cybersecurity funding, including $3.1 billion for an Information Technology Modernization Fund to enable the retirement, replacement, and modernization of legacy information technology.  The proposal also included education incentives such as scholarships and loan forgiveness, for cyber experts joining the Federal workforce.