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Obama submits budget to US Congress

Negotiations expected to be intense as Republicans have been adamant in their rejection of higher taxes.

Last Modified: 11 Apr 2013 07:36
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Obama says he met Republicans 'halfway' and has challenged them to show seriousness on deficit [AFP]

President Barack Obama has sent Congress a $3.8tn spending blueprint that strives to tame runaway deficits, raising taxes on the wealthy and trimming popular benefit programmes including Social Security and Medicare.

Obama continued his push on Wednesday for a compromise between Republicans who refuse to raise taxes and Democrats who are seeking to protect popular programmes that provide pensions and health care to the elderly and poor.

Battles between the two parties over budgeting priorities have brought the government to the brink of shutdown several times and the latest plan seeks to provide a longer term solution, so the administration does not have to stumble from crisis to crisis.

The president's spending and tax plan for the budget year that begins October 1 is two months late.

The administration blames the delay on the lengthy negotiations at the end of December to avert the so-called "fiscal cliff" of tax increases and spending cuts and fights over the March 1 automatic spending cuts.

The president's budget projects deficit reductions of $1.8tn over the next decade, achieved with higher taxes, reductions in payments to Medicare providers and cutbacks in the cost-of-living adjustments paid to millions of recipients in Social Security and other government programmes.

Republican battle

Early indications are that the budget negotiations will be intense.

Republicans have been adamant in their rejection of higher taxes, arguing that the $600bn increase on top earners that was part of the late December agreement to prevent the government from going over the "fiscal cliff" were all the new revenue they will tolerate.

As part of the administration's effort to win over the opposition, Obama hosted a private dinner at the White House with about a dozen Republican senators on Wednesday night.

Paul Ryan, chairman of the House Budget Committee, rejected the administration's argument that the refusal of Republicans to consider further tax increases represented inflexibility.

"We Republicans have already done things to move to the middle, to find common ground," he said on MSNBC.

"We really believe if we set the stage right, we can get fundamental tax reform."

Meeting 'half way'

The administration maintains that Obama's proposal is balanced with the proper mix of spending cuts and tax increases.

By including proposals to shrink Social Security and Medicare, the government's two biggest benefit programmes, Obama is hoping to entice Republicans to consider tax increases.

"I have already met Republicans more than halfway, so in the coming days and weeks I hope that Republicans will come forward and demonstrate that they're really as serious about the deficit and debt as they claim to be," Obama said in the White House Rose Garden.

The Obama budget's $1.8tn in new deficit cuts would take the place of the automatic $1.2tn in reductions required by a 2011 budget deal.

That provision triggered $85bn in automatic cuts for the current budget year, and those reductions, known as a "sequester", would not be affected by Obama's new budget.

It is unlikely that Congress will get down to serious budget negotiations until this summer, when the government once again will be confronted with the need to raise the government's borrowing limit or face the prospect of a first-ever default on US debt.

"President Obama has never been able to pass a budget through Congress," Al Jazeera's White House correspondent Patty Culhane said from Washington.

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Source:
Al Jazeera And Agencies
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