Obama's new budget: Higher taxes for the wealthy

WASHINGTON — President Barack Obama unveiled a $3.8 trillion spending plan on Monday that seeks to achieve $4 trillion in deficit reduction over the next decade but does little to restrain growth in the government's huge health benefit programs, a major cause of future deficits.

Obama's new budget was immediately attacked by Republicans as a retread of previously rejected ideas. The budget battle is likely to be a major component of the fall election campaign.

The president would achieve $1.5 trillion of the deficit reductions with tax increases on the wealthy and by removing certain corporate tax breaks. Rejecting GOP charges, he said in his budget message, "This is not about class warfare. This is about the nation's welfare."

In a message that repeated populist themes Obama also sounded in his State of the Union address, the president defended his proposed tax increases on the wealthy. It is important, he said to make sure the burden of getting deficits under control be a shared responsibility.

"This is about making fair choices that benefit not just the people who have done fantastically well over the last few decades but that also benefit the middle class, those fighting to get into the middle class and the economy as a whole," Obama said.

Obama used an appearance before students at Northern Virginia Community College to unveil the budget and highlight an $8 billion proposal that aims at boosting the ability of the nation's community colleges to train students for the jobs of the future. He told the students his budget was a "reflection of shared responsibility."

While administration officials defended the overall plan as a balanced approach, Republicans criticized it as failing to sufficiently restrain the deficit. Obama had promised in 2009 to cut the deficit in half by the end of his first term.

House Speaker John Boehner said that Obama's budget was a "collection of rehashes, gimmicks and tax increases that will make our economy worse."

"This isn't really a budget at all. It's a campaign document," said Senate Republican Leader Mitch McConnell of Kentucky. "The president is shirking his responsibility to lead and using this budget to divide."

Republican Rep. Paul Ryan, chairman of the House Budget Committee, said that Obama had ducked "the responsibility to tackle this country's real fiscal problems.

Ryan is preparing an alternative to Obama's budget that will be similar to a measure that the House approved last year but failed in the Senate where many lawmakers objected to a major overhaul to Medicare.