US President Barack Obama was scheduled to unveil an election-year budget yesterday that drops earlier proposals to cut future Social Security retirement benefits and seeks new money for infrastructure, education and job training in an indication that he is striving for unity among Democrats rather than compromise with Republicans.
However, Obama’s almost US$4 trillion budget plan is likely to have a short shelf life. It comes just three months after US Congress and the White House agreed to a two-year, bipartisan budget pact that has already set the parameters for this election year’s budget work.
Democrats controlling the Senate have already announced they will not advance a budget this year and will instead skip ahead to the annual appropriations bills for next year, relying on new spending “caps” set by December’s budget deal that provides US$56 billion less than what Obama wants next year.
Obama would divide the extra money equally between the Pentagon and domestic initiatives like boosting manufacturing hubs, job training and preschool programs, and cutting energy waste. Republicans are likely to balk at the idea, which would be paid for by curbing special interest tax breaks and making spending cuts elsewhere in the budget.
Obama has also announced a four-year, US$302 billion plan to boost spending on highways, rail projects and mass transit. Half of the initiative would be financed through corporate taxes.
Obama’s budget arrives after a tumultuous year that began with him muscling through a 10-year US$600 billion-plus tax increase on upper-bracket earners. Feeling stung, Republicans refused to yield on about US$80 billion in automatic spending cuts that began in March last year.
Then, conservative Republican lawmakers forced a 16-day partial government shutdown over funding to implement the nation’s new health insurance program. The small-bore, two-year budget deal emerged from the wreckage to alleviate the toughest automatic cuts.
Obama was expected to recommend tax changes that would generate billions in revenues. They include curtailing what the administration views as tax avoidance schemes by US companies with profits earned overseas and by foreign companies in the US.