Budget plan raises taxes on wealthy
WASHINGTON — President Barack Obama is sending Congress a $4 trillion budget today that seeks to raise taxes on wealthier Americans and corporations and use the extra income to lift the fortunes of families who have felt squeezed during tough economic times.
He would also ease tight budget constraints imposed on the military and domestic programs back in 2011, and unveils new initiatives including an ambitious $478 billion public works program for highway, bridge and transit upgrades.
The administration said the budget represented a strategy to strengthen the middle class and help “hard-working families get ahead in a time of relentless economic and technological change.”
Even before the massive budget books landed on lawmakers’ desks, Republicans were on the attack, accusing the president of seeking to revert to tax-and-spend policies that will harm the economy.
Obama’s fiscal blueprint, for the budget year that begins Oct. 1, proposes spending $4 trillion — $3.99 trillion before rounding — and projects revenues of $3.53 trillion.
That would leave a deficit of $474 billion. Obama’s budget plan never reaches balance over the next decade and projects the deficit would rise to $687 billion in 2025. The administration contends that various spending cuts and tax increases would trim the deficits by about $1.8 trillion over the next decade, leaving the red ink at manageable levels.
GOP Rep. Paul Ryan, the new chairman of the tax-writing House Ways and Means Committee, accused the president of exploiting “envy economics.”
Obama, interviewed by NBC before the start of Sunday’s Super Bowl game, said he believed there were areas where he can work with Republicans, who for the first time in his presidency control both houses of Congress.
Obama’s budget emphasizes the same themes as his State of the Union address last month, when he challenged Congress to work with him on narrowing the income gap between the very wealthy and everyone else.
While Republicans have let it be known that they have very different ideas about budget and tax priorities, Democrats voiced support for Obama.
“If we are serious about rebuilding the disappearing middle class we need a budget which creates millions of decent-paying jobs,” said Sen. Bernie Sanders, an independent who caucuses with Democrats and is the ranking member of the Senate Budget Committee.
Obama’s six-year $478 billion public works program would provide upgrades for the nation’s highways, bridges and transit systems, in an effort to tap into bipartisan support for spending on badly needed repairs.
Half of that money would come from a one-time mandatory tax on profits that U.S. companies have amassed overseas that would be set at 14 percent.
Higher taxes on the wealthy and on fees paid by the largest financial institutions would help raise $320 billion over 10 years which Obama would use to provide low- and middle-class tax breaks.
His proposals: a credit of up to $500 for two-income families, a boost in the child care tax credit to up to $3,000 per child under age 5, and overhauling breaks that help pay for college.
