2014 Budget

Feds feel the pinch in Obama's proposed spending plan

Obama and the budget

President Obama's budget proposal seeks to balance economic growth and deficit reduction. (FCW image)

President Obama's fiscal year 2014 budget offers a middle ground between the austerity budget passed by the Republican-led House and the more liberal document approved by the Senate. It promises deficit reductions of $1.2 trillion over 10 years, paid for with spending cuts and about $580 billion in new revenue, much of which will come from changing tax laws to get wealthy Americans to pay more in taxes.

The administration is seeking $1.058 trillion in discretionary spending, with $552 billion going to defense and $506 billion in non-defense spending. Overall spending, including mandatory programs, would hit $3.77 trillion, with a deficit of $744 billion.

"For years, the debate in this town has raged between reducing our deficits at all costs and making the investments necessary to grow our economy," Obama said on April 10. "And this budget answers that argument, because we can do both. We can grow our economy, and shrink our deficits."

The plan changes the way the cost-of-living increases to Social Security benefits are calculated, with a promised savings of $230 billion over 10 years. The plan also looks to streamline government operations. The budget includes 215 individual program cuts and consolidations targeting $25 billion in savings for fiscal year 2014, and $539 billion through 2023.

Government workers will feel the pinch. While the Obama budget allows for a one percent pay increase for 2014, government workers can expect to pay more towards their retirement and for their health care plans. And the Office of Personnel Management would be granted the discretion to increase employee premiums based on their tobacco use or participation in wellness programs.

The Obama administration hopes to speed its efforts to get unused property off its balance sheets, by co-location and consolidation of operations, and disposal of property. The administration hopes to achieve $2 billion in savings over 10 years through such efforts.

The savings promised from streamlining and cutting government operations outpaces revenue gains from changing the individual tax code. The Obama budget includes the so-called Buffett rule, which requires the wealthiest Americans to pay a 30 percent tax rate, which would raise just over $99 billion over 10 years.

Other revenue sources include capping the balance of tax exempt retirement accounts, and changes to estate taxation. Businesses and institutions will be tapped as well, with $159 billion projected to come in over 10 years from repatriated business income under international tax harmonization.

While Republican leaders in the House of Representatives have praised some of the entitlement reform in Obama's budget proposal, they have made it clear they're not interested in more tax revenues. Majority Leader Eric Cantor (R-Va.) said, "f the President believes, as we do, that programs like Medicare, Medicaid and Social Security are on the path to bankruptcy, and that we actually can do some things to put them back on the right course and save them to protect the beneficiaries of these programs, we ought to do so. And we ought to do so without holding them hostage for more tax hikes."

About the Author

Adam Mazmanian is FCW's senior staff writer, and covers Congress, health IT and governmentwide IT policy. Connect with him on Twitter: @thisismaz.

The 2015 Federal 100

Meet 100 women and men who are doing great things in federal IT.


  • Shutterstock image (by venimo): e-learning concept image, digital content and online webinar icons.

    Can MOOCs make the grade for federal training?

    Massive open online courses can offer specialized IT instruction on a flexible schedule and on the cheap. That may not always mesh with government's preference for structure and certification, however.

  • Shutterstock image (by edel): graduation cap and diploma.

    Cybersecurity: 6 schools with the right stuff

    The federal government craves more cybersecurity professionals. These six schools are helping meet that demand.

  • Rick Holgate

    Holgate to depart ATF

    Former ACT president will take a job with Gartner, follow his spouse to Vienna, Austria.

  • Are VA techies slacking off on Yammer?

    A new IG report cites security and productivity concerns associated with employees' use of the popular online collaboration tool.

  • Shutterstock image: digital fingerprint, cyber crime.

    Exclusive: The OPM breach details you haven't seen

    An official timeline of the Office of Personnel Management breach obtained by FCW pinpoints the hackers’ calibrated extraction of data, and the government's step-by-step response.

  • Stephen Warren

    Deputy CIO Warren exits VA

    The onetime acting CIO at Veterans Affairs will be taking over CIO duties at the Office of the Comptroller of the Currency.

  • Shutterstock image: monitoring factors of healthcare.

    DOD awards massive health records contract

    Leidos, Accenture and Cerner pull off an unexpected win of the multi-billion-dollar Defense Healthcare Management System Modernization contract, beating out the presumptive health-records leader.

  • Sweating the OPM data breach -- Illustration by Dragutin Cvijanovic

    Sweating the stolen data

    Millions of background-check records were compromised, OPM now says. Here's the jaw-dropping range of personal data that was exposed.

  • FCW magazine

    Let's talk about Alliant 2

    The General Services Administration is going to great lengths to gather feedback on its IT services GWAC. Will it make for a better acquisition vehicle?

Reader comments

Wed, Apr 17, 2013

@ People that earn.... BINGO!! Could not agree more! Medicare taxes every cent of earnings. Why doesn't social security. This hurts the middle and lower income Americans much more than the well off. I don't mind being hurt, if it's the same for all. It's not.

Fri, Apr 12, 2013

People that earn more than $113,700 do not pay Social Security taxes on earnings over $113,700. Everyone should have to pay Social Security taxes on all of their earnings, which would help replenish and keep the program intact. To have a cap on Social Security taxes is discrimination to lower and middle income Americans.

Thu, Apr 11, 2013

Keep the Federal Reserve AND keep it independent. They are the only entity keeping the nation afloat. Democrats and Republicans sure aren't. Without the Fed, we'd be totally toast!!

Thu, Apr 11, 2013

Fed employees: bend over.

Thu, Apr 11, 2013

Some of this Federal court house need to be shutdown especially when you look and the electricity, IT equipment and furniture that is being wasted by having those court houses that have no Judge's residing in them. Have District court once or twice a month just to fulfill that. Mag court every other day, and the cost of traveling to this locations is ridiculous what we have to pay for lawyers, Judges, Jurys when there is no need for that. Fleecing of America, what are we doing to ourselves.

Show All Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above