The President’s Budget is Out! What’s in it for Asset Building?

This morning the President released his budget request for FY 2014. Not everyone looks forward to this annual occurrence as much as Reid Cramer, but as a document that lays out a vision for how our government should work, we should all take notice.

A major theme for this year’s budget is building pathways of opportunity. This is exactly how we think of the role of asset building. But, as in years past, the bulk of the spending on policies that support saving and building assets are delivered through the tax code. This concentrates the benefits among households who are already wealthy instead of extending the opportunity to save to the families who would get the most out of those resources. Specifically, our analysis find that this year we will spend 

•    $248 billion for homeownership;

•    $177 billion for retirement security, and;

•    $96 billion for savings and investment activities.

all through the tax code.

The budget did include a proposal to cap the value of deductions at 28 percent, bringing them down to Reagan era levels, which would help curb the growth of wealth inequality that we’ve seen accelerate in recent years. But that’s only a start. There needs to be meaningful investment in policies to give low and middle income families the support they need to build financial security and climb the economic ladder. With conversations around tax reform brewing, this is an important moment to craft policies that realize that vision of building pathways of opportunity for everyone.

We’ll keep digging through the budget and report out what we find, so stay tuned!