Obama sends Congress $3.77 trillion spending plan
(Photo courtesy: Official White House Photo by Pete Souza)
Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Last Updated: 247 days ago
WASHINGTON - President Barack Obama is sending Congress a $3.77 trillion spending blueprint that seeks to tame runaway deficits by raising taxes further on the wealthy and trimming popular benefit programs but has drawn angry responses from both the right and left.
Obama is pushing for a compromise between Republicans who refuse to raise taxes and Democrats who are seeking to protect popular programs that provide pensions and health care to the elderly and poor.
Battles between the two parties over budgeting priorities have brought the government brink of shutdown several times and the latest plan seeks to provide a longer term solution, so the administration doesn't have to stumble from crisis to crisis.
The president's proposal being unveiled Wednesday includes an additional $1.8 trillion in deficit reduction over the next decade, bringing total deficit savings to $4.3 trillion, based on the administration's calculations.
As part of the administration's effort to win over the opposition, Obama will have a private dinner at the White House with about a dozen Republican senators Wednesday night. The budget is expected to be a primary topic, along with proposed legislation dealing with gun control and immigration.
Early indications are that the budget negotiations will be intense. Republicans have been adamant in their rejection of higher taxes, arguing that the $600 billion increase on top earners that was part of the late December agreement to prevent the government from going over the "fiscal cliff" were all the new revenue they will tolerate.
House Budget Committee Chairman Paul Ryan rejected the administration's argument that the refusal of Republicans to consider further tax increases represented inflexibility.
"We Republicans have already done things to move to the middle, to find common ground," Ryan said on MSNBC. "We really believe if we set the stage right, we can get fundamental tax reform."
The administration maintains that Obama's proposal is balanced with the proper mix of spending cuts and tax increases.
It projects that the deficit for the 2014 budget year, which begins Oct. 1, would fall to $744 billion. That would be the lowest gap between spending and revenue since 2008.
Obama has presided over four straight years of annual deficits totaling more than $1 trillion, reflecting in part the lost revenue during a deep recession and the government's efforts to get the economy going again and stabilize the financial system.
The Obama budget's $1.8 trillion in new deficit cuts would take the place of the automatic $1.2 trillion in reductions required by a 2011 budget deal. That provision triggered $85 billion in automatic cuts for the current budget year, and those reductions, known as a "sequester," would not be affected by Obama's new budget.
The budget plan already passed by the Republican-controlled House would cut deficits by a total $4.6 trillion over 10 years on top of the $1.2 trillion called for in the 2011 deal. The budget outline approved by the Democratic-controlled Senate tracks more closely to the Obama proposal, although it does not include changes to the cost-of-living formula for Social Security.
The president's plan tracks an offer he made to House Speaker John Boehner during December's budget negotiations, which Boehner ended up walking away from because of his opposition to higher taxes on the wealthy.
The Obama budget proposal will join competing budget outlines already approved by the Republican-controlled House and the Democratic-run Senate.
Obama's plan is not all about budget cuts. It also includes an additional $50 billion to fund infrastructure investments, including $40 billion in a "Fix It First" effort to provide immediate investments to repair highways, bridges, transit systems and airports nationwide.
Obama's budget would also provide $1 billion to launch a network of 15 manufacturing innovation institutes across the country, and it earmarks funding to support high-speed rail projects.
The president also is proposing establishment of program to offer preschool to all 4-year-olds from low- and moderate-income families, with the money to support the effort coming from increased taxes on tobacco products.
The administration said its proposals to increase spending would not increase the deficit but rather are paid for either by increasing taxes or making deeper cuts to other programs.
Among the proposed cuts, the administration wants to trim defense spending by an additional $100 billion and domestic programs by an extra $100 billion over the next decade.
The budget proposes cutting $400 billion from health care programs for the poor and elderly over a decade. The cuts would come in a variety of ways, including negotiating better prescription drug prices and asking wealthy seniors to pay more.
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.