WASHINGTON - Republicans were attacking President Barack Obama's election-year budget plan before it reached their desks Monday, a prelude to an expansion of the political gridlock that has seized the capital for more than a year.
While administration officials on Sunday defended the plan as a balanced approach, Republicans belittled the effort as a repeat of failed policies that did too little to attack soaring costs and threatened growth by raising taxes.
Obama's spending plan aims cut the federal deficit by $4 trillion over the next decade by restraining government spending and raising taxes on the wealthy. To help a weak economy, the president is asking more money for transportation, education and other areas.
The debate is almost certain to go all the way to Election Day in November, with gridlock keeping Congress from resolving many pressing issues on expiring tax cuts and across-the-board spending cuts until a lame-duck session at year's end. That is the period between the outcome of the November elections and the following January, when newly elected officials take their seats in Congress. Depending on the outcome of the presidential race, Obama, too, could be facing a departure from the White House in January.
Obama's spending blueprint for the budget year that begins Oct. 1 projects a deficit for this year of $1.33 trillion. That would mean four straight years of trillion-dollar-plus deficits.
The budget will project a decline in the deficit to $901 billion in 2013 and continued improvements shrinking the deficit to $575 billion in 2018.
Republicans said Obama's plan was a stark reminder that the Democratic president had failed to meet the pledge he made after taking office in 2009 to cut the deficit in half by the end of his first term.
But Jack Lew, Obama's chief of staff, said the administration had to contend with a deep recession and soaring unemployment that had driven the deficits higher than anyone anticipated. He said Obama's plan would cut the deficit below 3 per cent of gross domestic product by 2018, to levels that economists generally view as sustainable.
He said faster deficit cuts now would set back an economy still struggling with high unemployment. Lew, Obama's former budget chief, also said it was critical that Congress agree to extend a payroll tax cut due to expire at the end of February. Failure to extend it, he said, would cause another hit to the economy.
Republicans in the House of Representatives are preparing their version of a spending plan that would make deeper cuts in government entitlement programs while avoiding any tax increases.
Senate Republican leader Mitch McConnell said Senate Democrats did not want to vote on Obama's spending plan. To force their hands, he will once again put it forward for a Senate vote, where he predicted it would fail as it did last year.
Lew blamed House Republicans for pushing extreme measures rather than trying to reach consensus with Democrats and avoid the kinds of last-minute crises that roiled financial markets in 2011, such as the summer showdown over raising the government's borrowing limit.
According to a White House fact sheet, Obama's budget will adhere closely to the approach he outlined in September in a submission to the congressional "supercommittee" that failed to agree on at least $1.2 trillion in additional spending cuts to keep across-the-board cuts from taking effect next January.
The Obama budget sticks to the caps on annual appropriations approved in August that will save $1 trillion over the next decade. It also puts forward $1.5 trillion in new taxes, primarily by allowing the tax cuts to expire at the end of this year for families making $250,000 or more per year. Those cuts were put in place during the presidency of George W. Bush, Obama's predecessor.
Obama, as he has in the past, also proposed eliminating tax deductions the wealthy receive and would put in place a rule named for billionaire Warren Buffett that would seek to make sure that households making more than $1 million annually pay at least 30 per cent of their income in taxes.
Obama would also impose a new $61 billion tax over 10 years on big banks aimed at recovering the costs of the financial bailout and providing money to help homeowners facing foreclosure on their homes. It would raise $41 billion over 10 years by eliminating tax breaks for oil, gas and coal companies and claims significant savings from ending the wars in Iraq and Afghanistan.
Lew said the budget would cut spending by $2.50 for every $1 in extra taxes it seeks.
Among the areas targeted for increases, Obama is proposing $476 billion in increased spending on transportation projects including efforts to expand inner-city rail services.
© The Associated Press, 2012