By ANDREW TAYLOR, Associated Press
WASHINGTON (AP) — Even before it is unveiled, President Barack Obama's new budget is opening to poor reviews from liberal allies entrenched in their opposition to shaving benefit programs and GOP opponents equally opposed to new tax increases. The double-edged criticism comes even though the plan reprises a framework that once held the promise of a long-sought "grand bargain" for reducing government deficits.
Obama's budget, two months overdue but to be released Wednesday, mixes almost $600 billion in new taxes over the coming decade with modest curbs on spending, including lower-than-scheduled benefit increases for people receiving Social Security. The wealthy would lose the full benefit of some tax breaks while the poor and middle class would gradually slip into higher tax brackets.
Presidential budgets are often declared "dead on arrival" and this one may be just the latest to get that label. But it differs from last February's campaign-year missive by proposing a new, government-wide inflation adjustment — affecting Social Security, veterans' pensions and the indexing of tax brackets — that has long been offered to Republicans in hopes of winning concessions on new tax revenues.
Democrats in Congress seeking to make the wealthy pay even more taxes have comfortably staked out turf as defenders of "entitlement" programs like Social Security and Medicare despite Obama's willingness to tame their growth. Top Republicans, meanwhile, aren't in a compromising mood on taxes after yielding in January to $600 billion in higher taxes on top-bracket earners over the next decade.
"Mr. President, if you are ready to embrace bold reform — to take the steps that are needed to make our entitlement programs permanently solvent and grow the economy — then Republicans are ready to work with you," Senate Minority Leader Mitch McConnell, R-Ky., said Tuesday. "The time has come to summon the political courage to move beyond the status quo, to put the tax hikes and the poll-tested gimmicks aside, and to do what must be done."
The White House has already revealed the broad outlines of the plan, which incorporates a budget offer made by Obama to House Speaker John Boehner, R-Ohio, in December. Boehner rejected it and quit the talks.
"The president's been clear that it's going to take broad and shared sacrifice," Treasury Secretary Jacob Lew said in an interview with National Public Radio. "He would not find it acceptable to make only reductions in entitlement programs. That we need also to raise revenues so that we have a fair balance."
The White House says the Obama plan would cut deficits by a total of $1.8 trillion over a decade, reducing the annual red ink to the $500 billion range by 2016 and down to 1.7 percent of the size of the economy within 10 years. Obama presided over $1 trillion-plus deficits for the first four years of his presidency. But Obama also would do away with the $1.2 trillion in automatic spending cuts that were triggered last month, producing a net deficit reduction of just $600 billion.
The GOP-dominated House and the Democratic Senate each have already passed their own budget plans. The House blueprint would slash $4.6 trillion from the deficit over 10 years on top of the $1.2 trillion in automatic cuts mandated under a 2011 budget and government borrowing pact. The Senate budget generally resembles Obama's except for the proposal for a stingier inflation adjustment, which is reviled by liberal Democrats.
"I don't like it," said Sen. Jay Rockefeller, D-W.Va. "We've got to get to the reality of more revenues."
Some Republicans, however, welcomed Obama's overture on reducing the size of future cost-of-living increases in Social Security and other benefit programs. "It shows that the president is willing to talk about some of these ways to preserve our vital but unsustainable entitlement programs," said Sen. Rob Portman, R-Ohio.
Obama is expected it press his plan Wednesday night when he hosts a dozen GOP senators for dinner at the White House. For the most part, however, Republicans and Obama are still far apart.
Boehner complains that Obama is unwilling to consider things he was willing to do in the summer of 2011 — such as increasing the eligibility age for Medicare and cuts to the Medicaid health plan for the poor and disabled — when he and Obama held their first set of failed budget talks. Boehner and Obama are no longer talking, but they will have to in the not-too-distant future because Congress is going to need to increase the government's borrowing cap this summer to avoid a market-rattling U.S. default on its obligations.
Obama's budget also calls for increased spending, including $50 billion for infrastructure projects and a universal preschool program, financed by increasing the tax on tobacco.
It also reprises lower-profile ideas like higher Transportation Security Administration fees on airline tickets, the end of Saturday mail delivery and higher pension contributions for federal workers, hardy perennials of Obama's prior budgets that have been seen as candidates for inclusion in broader deficit deals that have never come to pass. He also proposes curbing farm subsidies and cutting $140 billion over a decade by reducing Medicare payments to drug companies.
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.