Obama sends Congress $3.8 trillion budget that trims Social Security, raises taxes
J. Scott Applewhite, Associated Press
WASHINGTON — President Barack Obama sent Congress a $3.8 trillion spending blueprint on Wednesday that strives to achieve a "grand bargain" to tame runaway deficits, raising taxes on the wealthy and trimming popular benefit programs including Social Security and Medicare.
The president's budget projects deficit reductions of $1.8 trillion over the next decade, achieved with nearly $1 trillion in higher taxes, reductions in payments to Medicare providers and cutbacks in the cost-of-living adjustments paid to millions of recipients in Social Security and other government programs. Obama's budget would negate nearly $1.2 trillion in automatic spending cuts, replacing some of those with smaller reductions of his own.
The president's proposed spending for the 2014 fiscal year, which begins Oct. 1, would rise 2.5 percent from this year.
The budget projects a deficit for the current year of $973 billion, falling to $744 billion in 2014. Those would be the first deficits below $1 trillion since 2008. Even with the president's deficit reductions, the budget projects the red ink would total $5.3 trillion over the next 10 years.
The plan includes a compromise proposal that Obama offered to House Speaker John Boehner during "fiscal cliff" negotiations last December. Boehner walked away from those talks because of his objections to raising taxes on the wealthy.
By including proposals to trim Social Security and Medicare, the government's two biggest benefit programs, Obama is hoping to entice Republicans to consider tax increases.
"I have already met Republicans more than halfway, so in the coming days and weeks I hope that Republicans will come forward and demonstrate that they're really as serious about the deficit and debt as they claim to be," Obama said in the White House Rose Garden.
But instead of moving Congress nearer a grand bargain, Obama's proposals so far have managed to anger both the Republicans, who are upset by higher taxes, and Democrats unhappy about cuts to Social Security benefits.
The White House highlighted $580 billion in tax increases on the rich over 10 years, which would be obtained primarily by limiting deductions the wealthy can take. But the figure climbs closer to $1 trillion after adding in a 94-cents-per-pack increase in taxes on cigarettes, slower inflation adjustments to income tax brackets, elimination of oil and gas production subsidies, an increase in the estate tax and a new "financial crisis responsibility" fee on banks.
Responding to the budget, Boehner said Republicans were unwilling to go beyond the $660 billion in higher taxes approved as part of the "fiscal cliff" deal. "The president got his tax hikes in January. We don't need to be raising taxes on the American people," Boehner said.
House Budget Committee Chairman Paul Ryan, R-Wis., said Obama's budget "doesn't break new ground. It goes over old ground. It takes more from families to spend more in Washington." Senate Republican Leader Mitch McConnell dismissed Obama's budget as "not a serious plan. For the most part, just another left-wing wish list."
Maya MacGuineas, president of the Committee for a Responsible Budget, a bipartisan group that promotes deficit reduction, praised Obama for retaining the deficit reduction elements of his December offer to Boehner in his new budget. She said this showed Obama was "still serous about fiscal reform."
Briefing reporters on the budget, Alan Krueger, chairman of the president's Council of Economic Advisers, said the economic growth assumptions for this year are a bit more optimistic than those of some private forecasters. He said the administration's forecast was done in November and assumed that the March 1 across-the-board spending cuts would not occur.
The president's spending and tax plan is two months late. The administration blamed the delay on the lengthy negotiations at the end of December and then fights over the resulting March 1 automatic spending cuts.
- Mystery man who rescued driver from cliff in...
- She paid for a family's groceries and got...
- Number of LDS converts, missionaries...
- 5 arguments Republicans are using to try and...
- Families make videos to reassure patients...
- US senator says it's time to put a woman on...
- Bacteria found in this Amazonian tribe has...
- See which 10 books were most frequently...
- Faith groups urge Supreme Court to... 61
- 5 arguments Republicans are using to... 26
- Hillary Clinton faces promise, risk of... 24
- US senator says it's time to put a... 19
- Hillary Rodham Clinton completes shift... 18
- Rep. Jason Chaffetz: Drug Enforcement... 15
- Climate change plan faces high-profile... 15
- Sen. Marco Rubio promises 'a new... 13