President Barack Obama’s budget, which will be introduced on Wednesday, takes a political position that some of his base is bound to bemoan.
Rather than present an outline of progressive priorities, the White House has chosen to stake claim to the middle ground, offering up a mix of modest tax hikes to go along with spending cuts and entitlement reforms that Democrats have long warned against.
President Barack Obama’s proposed budget will call for reductions in the growth of Social Security and other benefit programs while still insisting on more taxes from the wealthy in a renewed attempt to strike a broad deficit-cutting deal with Republicans.
The plan, if ever enacted, could touch almost all Americans. The rich would see tax increases, the poor and the elderly would get smaller annual increases in their benefits.
Middle income taxpayers would slip into higher tax brackets despite Obama’s repeated vows not to add to the tax burden of the middle class.
“If the president believes these modest entitlement savings are needed to help shore up these programs, there’s no reason they should be held hostage for more tax hikes,” Mr. Boehner said in a written statement. “That’s no way to lead and move the country forward.”
Obama would reduce the federal government deficit by $1.8 trillion over 10 years, according to a summary from the Obama administration provided Friday. The president’s budget, the first of his second term, incorporates elements from his last offer to House Speaker John Boehner in December.
Counting reductions and higher taxes that Congress and Obama have approved since 2011, the 2014 budget would contribute to $4.3 trillion in total deficit reduction by 2023.
The budget wouldn’t affect the $85 billion in cuts that kicked in last month for this budget year.
The Obama budget would cut $400 billion in spending on health programs over 10 years, including reduced payments to drug companies, among other things.
The plan would also change programs such as farm subsidies and federal pensions to achieve more deficit reduction, reports the Wall Street Journal.
“The president should drop these misguided cuts in benefits and focus instead on building support in Congress for investing in jobs.” AFL-CIO President Richard Trumka said in a statement.
The National Committee to Preserve Social Security and Medicare said seniors have averaged a cost-of-living increase of 1.3 percent over four years, writes the NY Daily News.
A key feature of the plan Obama is submitting for the federal budget year beginning Oct. 1 is a revised inflation adjustment called “chained CPI.” This new formula would effectively curb annual increases in a broad swath of government programs but would have its biggest impact on Social Security.
The new budget would pay for expanded access to pre-K (an Obama priority) by increasing the tobacco tax; as well as set limits on tax-preferred retirement accounts for the wealthy, prohibiting individuals from putting more than $3 million in IRAs and other tax-preferred retirement accounts.
And it would stop people from collecting full disability benefits and unemployment benefits that cover the same period of time, accoring to the Huff Post.