President Obama recently unveiled an ambitious budget proposal for fiscal 2013. The president’s plan includes $3.8 trillion in proposed spending and $4 trillion in deficit reduction, with the promise that by 2018, the federal deficit will be less than 3 percent of the GDP.
While many of the spending proposals in the president’s budget are welcome news here in New England, there are also some cuts that will surely be felt in our region.
Let’s start with some good news. We often hear that employers are struggling to find the highly skilled workers they need to fill those openings. So the president’s proposed $8 billion to encourage businesses and community colleges to work together to train 2 million workers for high-growth industries will surely be a boon for our region.
The president’s budget increases the maximum Pell Grant award, makes permanent a tax credit for college costs, and sets forth reforms to address rising educations costs by rewarding states and colleges who keep costs under control.
It is encouraging to hear that the president’s proposal includes $140.8 billion total for research and development (R&D), and expands and makes permanent the R&D tax credit. The plan also includes $2.2 billion specifically for advanced manufacturing R&D, which will benefit our region’s economy tremendously.
New England is home to a thriving defense industry. While the president would cut the overall defense budget by some $42 billion, the plan emphasizes developing naval and air capacities to address challenges in the Asia-Pacific region. This would surely benefit many of the defense contractors here in New England that specialize in shipbuilding and aerospace. However, the cuts include decreasing the overall size of the military, raising concerns that we could see another round of Base Realignment and Closing (BRAC) here.
Also troubling for our region’s health care sector is the $9.7 billion in reductions to graduate medical education, which would reduce Medicare payments to teaching hospitals in New England by over $430 million over the next decade.
At the end of the day, New England fares reasonably well under the President Obama’s plan. As we continue on the path to economic recovery, it is encouraging to know that the president’s priorities are very much in line with those of our region.
James T. Brett is the president and CEO of The New England Council.
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