President Obama unveiled his nonbinding federal budget request to Congress for fiscal year 2012 on February 14. The $3.73 trillion budget plan identifies tough choices in the president's spending and revenue priorities with the intention of reducing annual deficits. The budget proposal:

• Supports the Administration's domestic programs, including funding boosts for education, infrastructure improvements, and technology.
• Projects $1.1 trillion in deficit reduction over 10 years through a series of revenue and spending proposals including:
• Eliminating 2001 and 2003 tax cuts for high-income taxpayers.
  
• Cap on itemized deductions, including the deduction for charitable donations.
  
• Establishes a five-year spending freeze on top-line non-defense discretionary spending.
• Imposes a two-year salary freeze on federal civilian employees.
  
• Reduces and eliminates 200 programs and other initiatives for savings of $33 billion in FY 2012.

Charitable Deduction
President Obama's FY 2012 budget request includes a provision to cap at 28 percent the value of itemized deductions, including the deduction for charitable donations for families earning over $250,000 per year. Independent Sector has signed onto a coalition letter urging the president to reconsider his proposal to limit the charitable deduction. LEARN MORE.

Analysis of the President’s Budget

• Independent Sector summary (IS member password required)
• Administration FY 2012 budget overview
• Tax proposal summary (PDF)
• IS Webinar - President's FY 2012 Budget: Sector Impact and Implications
  
• Watch the Feb. 24 webinar and view the slides (free for IS members)         

Tax Issues (IS member password required)
The Obama budget calls for tax initiatives to help spur economic development and reduce annual deficits; reinstating the estate tax at the 2009 levels once the current estate tax rates expire at the end of 2012; maintaining the 2001 and 2003 tax cuts for middle class earners; and increasing taxes on incomes over $250,000, including a measure that would limit the value of itemized deductions for charitable donations to offset the cost of alternative minimum tax (AMT) relief.

Spending Items (IS member password required)
The Obama budget outline for fiscal year 2012 sets discretionary spending for both defense and non-defense programs at $1.34 trillion. It calls for boosting funding for some domestic priorities, including education, infrastructure programs, and technology, while imposing a five-year top-line cap on non-defense funding and the elimination and spending reduction of numerous federal programs.