After three years of battling Republicans over spending cuts and deficit reduction, President Obama said in his new budget Tuesday that red ink has been tamed and that it’s now time to begin looking for areas to add more funding — paid for by hiking taxes on the wealthy.
Mr. Obama’s $3.9 trillion 2015 budget calls for more investment in education, including preschool and full-day kindergarten for all children, and for a massive influx of new money to replenish the federal road-building program.
The proposal boosts spending by $56 billion in 2015 and by hundreds of billions over the next decade, all of it paid for with budget cuts in some places and a new round of tax hikes.
“At a time when our deficits are falling at the fastest rate in 60 years, we’ve got to decide if we’re going to keep squeezing the middle class,” Mr. Obama said.
Still, this year’s budget received scant attention compared with previous years, as the budget process itself has become broken. Mr. Obama’s budget was a month later than the deadline set in law, and Congress itself hasn’t passed a full budget since 2009.
House Republicans have said they will try to write a budget this year, but they won’t have a negotiating partner, since Senate Democrats have already signaled they won’t write one.
Senate Minority Leader Mitch McConnell, Kentucky Republican, said Mr. Obama’s blueprint probably couldn’t even make it through the Democrat-controlled Senate.
“Folks just aren’t taking it seriously, because it’s not a serious document,” he said.
Indeed, both House and Senate spending committees have already rejected Mr. Obama’s higher 2015 spending number, saying they’ll write their bills to the level agreed to in a December deal.
Under Mr. Obama’s plan, the federal government would run a $564 billion deficit in 2015, which would be a record low for Mr. Obama’s tenure. But the deficit would remain at about half a trillion dollars a year for the next 10 years, meaning debt would continue to pile up. By 2024, Mr. Obama projects gross debt would be $27.5 trillion.
Much of the better fiscal picture relies on tax increases and passing an immigration bill, which the White House says will boost the economy and therefore produce more tax money that can be spent on Mr. Obama’s priorities.
The president said he’ll invest the money in programs that will pay dividends for the economy for years to come, such as education and infrastructure.
“My budget is designed with their generation and future generations in mind,” Mr. Obama said while visiting Powell Elementary School in the District of Columbia.
He also rejected spending cuts he and Congress have agreed to in recent years, saying the government is wounding basic domestic programs. He instead said higher domestic spending can be accommodated by raising taxes on the wealthy.
A $302 billion transportation-building program would be paid for by eliminating tax breaks for businesses — a move that is unlikely to sit well with Republicans, who have said any corporate-tax code changes will have to be revenue neutral.
Mr. Obama also proposed a federal tobacco-tax hike to pay for federal funding to guarantee preschool and full-day kindergarten for children from low- and middle-income families.
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