President Obama is set to release his budget proposal Wednesday, and it already is drawing criticism from both parties. (AFP / Getty Images)
WASHINGTON — President Obama will unveil his budget later Wednesday, offering a fiscal plan that even before it’s officially released is eliciting groans from his conservative opponents as well as his backers on the left.
The president’s 2014 budget details a plan for cutting the deficit by $1.8 trillion over the next decade, while also calling for billions of dollars in new spending to repair the country’s infrastructure and bolster education, according to a White House overview of the document.
The budget is scheduled to be unveiled at 11:15 a.m., but the White House laid out broad outlines it ahead of its release.
The plan claims to achieve $400 billion in savings by cutting waste and fraud in Medicare and $580 billion in new revenues by limiting tax benefits for top earners. It also saves $230 billion by restructuring cost-of-living adjustments for beneficiaries of Social Security, according to the White House.
The plan includes $2 in spending cuts for every dollar in new revenue. Overall, the budget details $3.77 trillion in government spending for 2014, and the deficit for the year is projected to come in at $744 billion, or 4.4 percent of GDP.
Even before the budget’s official release, GOP lawmakers have framed it as a small bore effort when it comes to deficit cutting, because it assumes the elimination of the $1.2 trillion in automatic budget cuts, known as sequester, that were triggered earlier this year. The Obama budget also relies, in part, on raising taxes — a red line Republicans say they will not cross.
Specifically, the president wants those who make $1 million or more to pay at least 30 percent of their income in taxes and limit deductions for the top 2 percent of earners.
“We hear it contains tax hike upon tax hike upon tax hike — and, in fact, all of the deficit reduction ... would be derived from myriad tax increases rather than spending reductions,” Senate Minority Leader Mitch McConnell said Tuesday. “Apart from reports of a modest entitlement change — and we’ll need to see the details on that — it sounds like the White House just tossed last year’s budget in the microwave.”
Top aides to the president argued that the Obama budget will promote growth while cutting the deficit in a responsible way. They also said that raising new revenues is non-negotiable.
Aides acknowledge that getting the GOP-controlled House to agree to new revenues will be difficult, but they maintain it’s not impossible.
“If the view of leadership or view of the House is, ‘My way or the highway. . .’ then the answer will be nothing,” said a senior administration official, who spoke on condition of anonymity to discuss the yet-to-be-released budget.
Speaking to reporters Tuesday, Senate Majority Leader Harry Reid shrugged at the White House plan to include “chained-CPI,” a new measure of inflation to calculate cost-of-living adjustments for Social Security. The budget passed by the Democratic-controlled Senate doesn’t include chained-CPI.
“We have our budget. It was passed. It’s a good budget.” Reid told reporters, and it reflects “the priorities of the American people and the Democrats. The president has his budget.”
A coalition of groups that have supported Obama in the past — including the AFL-CIO, MoveOn.org and the National Organization for Women — delivered 2 million petition signatures to the White House on Tuesday from Americans who oppose restructuring Social Security.
“Let’s face it: Instituting the chained CPI is like tripping someone at the end of a race after forcing them to run on the outside lane the whole way,” said NOW President Terry O’Neill.
The budget will also lay out more details of Obama’s wish list for new spending that he says will help spur job growth and equip Americans for a rapidly evolving economy.
In his State of the Union Address in February and subsequent speeches, Obama has said that wants to earmark $50 billion for infrastructure investments and $1 billion to launch a network of up to 15 manufacturing innovation institutes. He also wants to establish a universal early education program that would make preschool available to all low- and middle-income families.
The preschool initiative would be paid for by raising the federal tax on cigarettes and other tobacco products, but White House officials declined to offer a price tag for the program ahead of the release of the budget.
Obama will have the opportunity to begin selling Republican lawmakers later in the day. He’s hosting 12 GOP senators for dinner at the White House on Wednesday night.
Aamer Madhani writes for USA Today. Susan Davis also contributed to this story.