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President Obama Unveils $3.8 Trillion Budget

Paige Brettingen |
April 10, 2013 | 10:27 a.m. PDT

Executive Producer

President Obama's plans include capping tax breaks and curtailing federal benefits (Wikimedia Commons)
President Obama's plans include capping tax breaks and curtailing federal benefits (Wikimedia Commons)

President Barack Obama proposed a $3.8 trillion spending plan on Capitol Hill Wednesday as part of a 10-year budget blueprint.

The plan puts about $250 billion toward jobs, public works and expanded pre-school education and would accumulate $800 billion in new taxes, including the extra 94 cents per pack of cigarettes.

The Washington Post reported that the plan would also reduce the costs of Social Security and Medicare as part of cutting more than $1 trillion from federal government programs.

  • “Our economy is poised for progress, as long as Washington doesn’t get in the way,” Obama said in announcing his budget plan in the White House Rose Garden. He said his budget represents “a fiscally responsible blueprint for middle-class jobs and growth.”
  • He said his budget replaces “the foolish across-the-board spending cuts” known as the sequester that are “already hurting our economy.” The plan reduces the deficit and makes necessary investments “because we can do both,” he said. “We can grow our economy, and shrink our deficits.”
  • He added: “The numbers work. There’s not a lot of smoke and mirrors in here.”

SEE ALSO: Obama To Release New Budget Plan

According to Bloomberg News, the president's plan to cut entitlement spending, especially for social security, is getting criticism from Democrats.

  • "This is bad policy that will slow economic recovery even further,” Richard Trumka, president of the AFL-CIO said on the union’s website. “America elected President Obama to protect us from bad Washington ideas like ‘‘chained’’ CPI, not to advocate for them.”

Chained CPI is a new way to measure inflation. It reduces projected federal spending "by slowing the growth in federal benefits that are annually adjusted for cost of living," CNN reported. Social security is among the federal benefits that would be affected. According to CNN, "By 2020, the use of chained CPI could mean an average tax increase of $311 among the nearly 81% of households that would see a tax increase, the Tax Policy Center estimates"

However, CNN also reported that the president's budget suggests ways to help low-income veterans, recipients of Supplemental Security Income and the oldest Social Security recipients so they wouldn't be as affected.

Another component of the budget is to limit the value of itemized deductions and exclusions for high-income households. President Obama would cap that rate at 28 percent, which is below the top two income tax rates. Whereas someone in the 39.6 percent tax bracket today would save $39.60 on $100, under Obama's proposal, it wouldn't exceed $28.

SEE ALSO: Obama Says Party Gap Too Wide For Budget Deal

The budget is late this year and follows the Senate and House each having passed their own different 2014 budget plans. There are also reports that it is unlikely the plan will be accepted in its entirety by Capitol Hill.

House Speaker John Boehner said the president "deserves some credit" for proposing changes to control costs of entitlement programs, but doesn't agree with the tax increases.

“The president got his tax hikes in January,” Boehner, an Ohio Republican, said this morning at the Capitol, according to Bloomberg. “We don’t need to be raising taxes on the American people.”

 

Find more Neon Tommy coverage of the budget negotiations here.

Reach Executive Producer Paige Brettingen here. Follow her here.



 

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