Reducing the deficit by $4 trillion over 10 years sounds ok until you take into account that the deficit has increased over $1 trillion per year over the last 4 years. Full story here.
The president will send Congress a budget that will provide short-term help to a struggling economy while offering a long-term plan to deal with soaring deficits, the White House said Sunday. Republicans attacked the spending blueprint as offering more of the same failed solutions for the economy.
The 2013 budget being released Monday will propose public works spending while seeking tax increases on the wealthy and corporations to claim progress on the federal deficit in his upcoming budget. The spending plan projects a deficit for this year of $1.3 trillion, the fourth straight year of $1 trillion-plus deficits, and $901 billion next year.
Jacob Lew, the president’s chief of staff, said the new budget would put the country on track to achieve $4 trillion in deficit reductions over the next 10 years, achieved by raising taxes on the wealthy and trimming government spending. Lew said the president’s budget would cut spending by $2.50 for every $1 it raises in new taxes.
“In the long run, we need to get the deficit under control in a way that builds the economy,” Lew said during appearances on the Sunday talk shows. “We do it in a way that’s consistent with American values so that everyone pays a fair share.”
The release of Obama’s spending plan for the budget year that begins Oct. 1 marks the official start to an election-year budget battle over taxes and spending as the nation’s debt tops $15 trillion.
Republicans on Sunday criticized the document for its proposals to increase spending in such areas as infrastructure and for its tax increases.
House Republicans will put forward a sharp alternative to Obama’s plan that will provide deficit reduction through an overhaul of Medicare and other programs and without tax increases.
“We’re taking responsibility for the drivers of our debt,” said the chairman of the House Budget Committee, Rep. Paul Ryan, R-Wis. “So when the dust settles and people see actually what we’re doing, how we’re promoting bipartisan solutions.”
The president’s plan is laden with stimulus-style initiatives, like sharp increases for highway construction, school modernization, and a new tax credit for businesses that add jobs. But it avoids sacrifice, with only minimal curbs on the unsustainable growth of Medicare even as it slaps a 10-year, $61 billion “financial crisis responsibility fee” on big banks to recoup the 2008 Wall Street bailout.
The budget, administration officials say, borrows heavily from Obama’s September submission to a congressional deficit “supercommittee” assigned to come up with at least $1.2 trillion in deficit savings as part of last summer’s budget-and-debt pact that avoided a first-ever U.S. default on its obligations. The panel deadlocked and left Washington to grapple with bruising across-the-board spending cuts that kick in next January.
Obama’s plan predicts deficit savings of more than $4 trillion over a decade, mixing $1 trillion already banked through last summer’s clampdown on agency operating budgets with $1.5 trillion in higher tax revenues reaped from an overhaul of the tax code. It also claims savings from reduced war costs and takes just a nip at federal health care programs even as it promises $476 billion for road and other surface transportation programs over six years, a significant increase.
It’s already received a chilly reception from Republicans who say Obama isn’t doing enough to tame the deficit or curb the rapid growth of benefit programs like Medicare.
The budget will also call for a “Buffett Rule” named after billionaire Warren Buffett that would guarantee that households making more than $1 million a year pay at least 30 percent of their income in taxes.