President Barack Obama’s Fiscal Year 2013 budget isn’t inherently unique or surprising.
It sticks to the same objectives that the White House has pursued for months: short-term investments in job growth, combined with a mix of long-term spending cuts and revenue raisers to achieve a decent amount of deficit reduction, reports The Huff Post.
The $3.8 trillion (£2.4 trillion) plan officially broke Mr Obama’s promise to halve America’s now-$1.33 trillion (£842 billion) budget deficit by the end of his first term, calling instead for tamer reductions.
Formally introduced on Monday, the budget includes $3.8 trillion in new spending and seeks to achieve $4 trillion in deficit reduction over the next decade, laying bare the fault lines that will divide the two parties from now till election day.
The White House is calling for $1.5 trillion in tax increases to help compensate for investments elsewhere.
This includes letting the Bush-era tax cuts on top earners expire, closing loopholes enjoyed by prosperous industries, and reverting the rates on capital dividends back to those charged on ordinary income (with exemptions for lower earners).
Mr. Obama traveled to Northern Virginia Community College near Washington to unveil his budget before a gymnasium packed with the sort of young voters his re-election campaign is courting.
“We don’t begrudge success in America,” Mr. Obama said, according to The New York Times. But, he added, “We do expect everybody to do their fair share, so that everybody has opportunity, not just some.”
The budget formally proposed the so-called “Buffett Rule”, named after the billionaire financier Warren Buffett, which would ensure that million-dollar earners paid at least 30 per cent in tax, The Telegraph informs.
With hundreds of billions in proceeds going on projects such as new infrastructure spending and vocational training, it would also close tax loopholes opened by George W. Bush for families earning $250,000 (£158,338) a year.
Many have responded to the proposal with a great deal of alarm.
The reaction has been decidedly political on both sides, with the White House making a major bet that the country is tired of austerity measures and Republicans jumping to brand the president as a paradigm of fiscal irresponsibility.
“The president’s budget is a gloomy reflection of his failed policies of the past, not a bold plan for America’s future. It is bad for job creation, our economy, and America’s seniors,” said House of Representatives Speaker John Boehner, the top Republican in Congress.
“The President’s goal isn’t to solve our problems, but to ignore them for another year,” said Senate Minority Leader Mitch McConnell (R-Ky.), in what was one of many harshly critical Republican responses. “If anybody wants to know what a failure of leadership looks like, this is it.”
The president’s budget incorporates his alternative to the automatic cuts. Mr. Obama claims $3 trillion in deficit reduction from higher revenues and spending cuts, on top of nearly $1 trillion in cuts over 10 years from annual discretionary spending that he and Congress agreed to in a deal last August.
That does not include the so-called entitlement programs, Medicare, Medicaid and Social Security, whose fast-growing costs — especially for Medicare — are driving the projections of mounting federal debt.
The budget would use projected military savings — a gimmick, Republicans say — to help pay for a six-year, $476 billion program to modernize the nation’s transportation network.
“The president’s budget is a reasonable opening move for what will likely be major budget negotiations after the election and before the Bush tax cuts are due to expire at the end of the year,” said Jim Kessler, vice president for policy at Third Way, a centrist policy organization.
“The real work begins in November, and right now these opening moves are just pawns shifting on the chessboard,” Mr. Kessler added. “As a deficit hawk, I’m guardedly optimistic about this budget.”
The current year’s deficit of $1.3 trillion is the same in dollar terms as when Mr. Obama took office. Measured as a share of an improved economy it is smaller — 8.5 percent of the gross domestic product compared with 9.2 percent in 2009. For 2013 the deficit would be $901 billion, or 5.5 percent of G.D.P.