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| Obama Unveils Budget Meant to Draw G.O.P. to the Table | |
| (about 1 hour later) | |
| WASHINGTON – In his fifth annual budget proposal to Congress on Wednesday, President Obama once again has put forward a fiscal mix of investments in infrastructure, education and research with further deficit reduction through tax increases and spending cuts. But for the first time he has included changes to Medicare and Social Security intended to entice Republicans back to the bargaining table. | WASHINGTON – In his fifth annual budget proposal to Congress on Wednesday, President Obama once again has put forward a fiscal mix of investments in infrastructure, education and research with further deficit reduction through tax increases and spending cuts. But for the first time he has included changes to Medicare and Social Security intended to entice Republicans back to the bargaining table. |
| The main new element of the budget is his proposal, offered previously in private negotiations with Speaker John A. Boehner, for a new cost-of-living formula that would reduce future Social Security benefits. On the spending side, Mr. Obama wants to help states make prekindergarten available universally, paid for by higher taxes on tobacco products. | The main new element of the budget is his proposal, offered previously in private negotiations with Speaker John A. Boehner, for a new cost-of-living formula that would reduce future Social Security benefits. On the spending side, Mr. Obama wants to help states make prekindergarten available universally, paid for by higher taxes on tobacco products. |
| For fiscal year 2014, which begins Oct. 1, the federal deficit would be $744 billion, according to administration officials. That would be equal to about 4.4 percent of the gross domestic product, down from a high of about 10 percent at the height of the recession. By decade’s end, the annual deficit would be 1.7 percent, officials said, though deficits would increase thereafter as aging baby boomers drive up costs for federal benefit programs. | For fiscal year 2014, which begins Oct. 1, the federal deficit would be $744 billion, according to administration officials. That would be equal to about 4.4 percent of the gross domestic product, down from a high of about 10 percent at the height of the recession. By decade’s end, the annual deficit would be 1.7 percent, officials said, though deficits would increase thereafter as aging baby boomers drive up costs for federal benefit programs. |
| Though Republican leaders in Congress spurned Mr. Obama’s intended overture after early reports late last week, rejecting further tax increases on the wealthy and calling the spending cuts too small, Mr. Obama is hoping that rank-and-file Republican senators can be persuaded to join with him and Senate Democrats in a compromise. He will dine with a dozen Senate Republicans on Wednesday night. | Though Republican leaders in Congress spurned Mr. Obama’s intended overture after early reports late last week, rejecting further tax increases on the wealthy and calling the spending cuts too small, Mr. Obama is hoping that rank-and-file Republican senators can be persuaded to join with him and Senate Democrats in a compromise. He will dine with a dozen Senate Republicans on Wednesday night. |
| Mr. Obama incorporated the compromise offers on Social Security and Medicare into his annual budget for the first time — over vehement objections from many Democrats — in part after earlier private discussions with individual Republican senators about what he could do to assure them of his seriousness about reaching a long-term deal to stabilize the national debt. | Mr. Obama incorporated the compromise offers on Social Security and Medicare into his annual budget for the first time — over vehement objections from many Democrats — in part after earlier private discussions with individual Republican senators about what he could do to assure them of his seriousness about reaching a long-term deal to stabilize the national debt. |
| The 10-year budget plan would cut spending by about $1.2 billion over that time to replace the indiscriminate across-the-board cuts, known as sequestration, that took effect March 1 when Mr. Obama and Republican leaders failed to agree on alternative deficit-reduction measures. | The 10-year budget plan would cut spending by about $1.2 billion over that time to replace the indiscriminate across-the-board cuts, known as sequestration, that took effect March 1 when Mr. Obama and Republican leaders failed to agree on alternative deficit-reduction measures. |
| Mr. Obama would reduce deficits more than $600 billion further in that time by additional tax increases on the wealthy and some corporations — roughly the same amount of tax increases that took effect on Jan. 1 when he and Congress agreed to end the Bush tax cuts on high incomes. | Mr. Obama would reduce deficits more than $600 billion further in that time by additional tax increases on the wealthy and some corporations — roughly the same amount of tax increases that took effect on Jan. 1 when he and Congress agreed to end the Bush tax cuts on high incomes. |
| It is largely because of delays forced by those year-end negotiations, the administration has said, that Mr. Obama’s budget is reaching Capitol Hill two months late and after both the Republican-controlled House and Democratic-controlled Senate have approved budget blueprints of their own. But those plans will be nearly impossible for the two chambers of Congress to reconcile, stoking White House hopes that Mr. Obama’s budget can provide an alternative path to a compromise. | It is largely because of delays forced by those year-end negotiations, the administration has said, that Mr. Obama’s budget is reaching Capitol Hill two months late and after both the Republican-controlled House and Democratic-controlled Senate have approved budget blueprints of their own. But those plans will be nearly impossible for the two chambers of Congress to reconcile, stoking White House hopes that Mr. Obama’s budget can provide an alternative path to a compromise. |
| By the administration’s calculation, the total $1.8 trillion in savings over 10 years, together with more than $2.5 trillion in spending cuts agreed to since mid-2011, would bring the tally for deficit reduction to more than $4.3 trillion. That is about the 10-year goal that both parties have sought, but Republican leaders are resolved to oppose new tax increases and their House plan calls for much deeper reductions in Medicare and in most other federal programs except the military. | |
| “The question is, are Republicans going to be willing to come to us to do the serious things that they say are so important in terms of reducing our deficit,” said a senior administration official, who declined to be identified discussing the budget in advance of its release. | “The question is, are Republicans going to be willing to come to us to do the serious things that they say are so important in terms of reducing our deficit,” said a senior administration official, who declined to be identified discussing the budget in advance of its release. |
| “If they refuse to include revenues in any deal, then there will be no deal,” the official said. “It’s that simple. Basically, what’s not going to happen is a deficit-reduction approach that does it all on the backs of the middle class and seniors.” | “If they refuse to include revenues in any deal, then there will be no deal,” the official said. “It’s that simple. Basically, what’s not going to happen is a deficit-reduction approach that does it all on the backs of the middle class and seniors.” |
| Under any of the plans, the federal budget for the next fiscal year would total about $3.7 trillion. But only just over $1 trillion of that is so-called discretionary spending for domestic and military programs that the president and Congress set annually. Most of the rest is spending for the entitlement programs — chiefly Medicare, Medicaid and Social Security — that automatically flow to beneficiaries unless the White House and Congress change them by law. | Under any of the plans, the federal budget for the next fiscal year would total about $3.7 trillion. But only just over $1 trillion of that is so-called discretionary spending for domestic and military programs that the president and Congress set annually. Most of the rest is spending for the entitlement programs — chiefly Medicare, Medicaid and Social Security — that automatically flow to beneficiaries unless the White House and Congress change them by law. |
| Mr. Obama would raise an estimated $580 billion in new revenue over a decade mainly through two ways. For the fifth time he is proposing that affluent taxpayers in higher tax brackets must limit their deductions to the 28 percent rate; while Congress has annually ignored that idea, there are signs of growing support as lawmakers seek new ways to reduce deficits. The second change would impose his so-called Buffett Rule, requiring that people with annual taxable income above $1 million pay at least 30 percent in income taxes. | Mr. Obama would raise an estimated $580 billion in new revenue over a decade mainly through two ways. For the fifth time he is proposing that affluent taxpayers in higher tax brackets must limit their deductions to the 28 percent rate; while Congress has annually ignored that idea, there are signs of growing support as lawmakers seek new ways to reduce deficits. The second change would impose his so-called Buffett Rule, requiring that people with annual taxable income above $1 million pay at least 30 percent in income taxes. |