The Obama administration on Wednesday will unveil a $3.8 trillion spending blueprint, a so-called “grand bargain,” two months late and filled with recommendations that have angered both Republicans and Democrats.
Here are some of the key proposal included on President Obama’s 2014 budget:
- $3.77 trillion in spending
- $744 billion deficit
- $580 billion in net revenue from higher taxes on wealthy income earners
- $50 billion in road repair and mass transit spending
- $210 billion in expected savings from lower interest payments
- Free and universal access to pre-kindergarten for all four-year-olds
- $400 billion in health care cuts, primarily through higher costs imposed on doctors, hospitals and drug companies
- $1 billion to launch “a network of 15 manufacturing innovation institutes across the country,” as the Associated Press puts it, “and it earmarks funding to support high-speed rail projects.”
- Expected revenue from the so-called “Buffett Rule,” which would require households with annual income over $1 million pay at least a 30 percent tax rate after charitable deductions.
- $200 billion in new discretionary spending cuts divided equally between defense and non-defense programs.
- A 20 percent increase in what we can refer to as the “charity tax,” according to Forbes’ Howard Husock.
“Every new initiative in the plan is fully paid for, so they do not add a single dime to the deficit,” the White House promised on Tuesday.
The budget calls for an additional $1.8 trillion reduction in deficit spending over the next 10 years. The administration says this will bring total deficit savings to $4.3 trillion.
“It projects that the deficit for the 2014 budget year, which begins Oct. 1, would fall to $744 billion. That would be the lowest gap between spending and revenue since 2008,” the Associated Press notes.
But Republicans are unhappy with the budget’s call for higher taxes and more spending while some Democrats are unhappy with the proposal’s plan to tweak Social Security spending.
“So where are the net spending cuts? I guess they don’t exist,” House Speaker John Boehner’s press secretary, Brendan Buck, told The Daily Caller in an email. “The president’s budget will — at best — be flat on spending — or potentially even be a net spending increase [and] any deficit reduction will come exclusively from tax hikes.”
Senate Minority Leader Mitch McConnell was unimpressed.
“Mr. President, if you are ready to embrace bold reform — to take the steps that are needed to make our entitlement programs permanently solvent and grow the economy — then Republicans are ready to work with you,’ he said.
“The time has come to summon the political courage to move beyond the status quo, to put the tax hikes and the poll-tested gimmicks aside, and to do what must be done,” he added.
Independent Sen. Bernie Sanders, a liberal, opposes the president’s call to switch the way government calculates inflation (i.e. “chained CPI”). The Obama administration says that recalculating government’s inflation formula would cut spending to government entitlement programs by $130 billion over 10 years.
But Sen. Sanders in a statement said that he was “terribly disappointed” with the president and said he would do “everything in [his] power to block President Obama’s proposal to cut benefits for Social Security recipients.”
Meanwhile, Jim Dean, chairman of Democracy for America, says the president has abandoned his voters.
“Real Democrats do not cut Social Security or Medicare or Medicaid ever,” said Dean. “We are here to tell the president that we do not have his back on this proposal. We are also here to tell Congress that we will have the back of those who are going to defend Social Security and that we are prepared to primary those who will not.”
The White House blames the budget’s tardiness on lengthy “fiscal cliff” negotiations and the March 1 automatic spending cuts.
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