As President Barack Obama prepares to unveil his blueprint for U.S. government spending, White House officials are already defending the document from Republican attack. The Obama budget, to be released later Monday, is expected to call for a mix of spending restraint and tax hikes to shrink the runaway U.S. deficit during the next decade.
President Obama has long urged what he calls a “balanced approach” of higher taxes and lower spending to fix America’s fiscal woes. He has urged immediate measures to stimulate the economy combined with long-term budgetary restraint.
White House Chief of Staff Jacob Lew says the president’s new budget reflects those priorities.
“The president’s budget is a plan for 10 years. In the short term we need to keep the economy growing, and in the long term we need to get the deficit under control in a way that builds an economy that can last for the future, where we build a manufacturing base, we have Americans with the skills to do the work of the future.”
Lew, who until recently served as Obama’s top budget official, made the remarks in a U.S. television interview.
Early reports say the president’s budget would raise taxes on top earners and force investors to pay similar tax rates on stock market profits as ordinary Americans pay on their wages and salaries. At the same time, the Obama budget would reportedly boost funding for U.S. infrastructure, unemployment benefits, and federal assistance to revenue-strapped states.
Addressing a Washington gathering of conservative political leaders and activists last week, the Budget Committee chairman in the Republican-controlled House of Representatives, Paul Ryan, dismissed the White House budget blueprint as a continuation of failed and counter-productive Democratic policies.
“His proposals have three things in common: they load massive tax increases on small businesses and hardworking families, they require bureaucratic rationing in government health care programs, and they hollow out our national security.”
Not so, according to Jacob Lew.
“If you look at our budget, for every dollar of [new] revenue, there are two-and-a-half dollars of spending reductions. So I think it is clearly not the case that this is a budget based on just raising taxes. But we [currently] have tax cuts that go to people who do not need them. We have tax cuts going to the wealthiest people in America, who are going to have to pay their fair share.”
In the first year of his administration, President Obama pledged to cut the federal deficit in half by the end of his first term. The deficit exceeded $1 trillion in 2009 and, according to White House projections, is expected to do so again this year.