News Column

Economy, Jobs Heart of 2014 Obama Budget

April 10, 2013
2014 Obama Budget

Economic growth and job creation are the primary objectives of the budget proposal U.S. President Barack Obama will unveil Wednesday, the White House said.

"Everything else is a means to achieving that objective," White House spokesman Jay Carney said ahead of the release of the budget, widely expected to call for more than $3.5 trillion in government spending but also entitlement cuts cherished by Democrats.

Obama was to deliver a statement about the budget in the White House Rose Garden at 11 a.m., the White House said.

He was to follow that at 6:30 p.m. with a White House pizza dinner with a dozen Republican senators, including Johnny Isakson of Georgia and Orrin Hatch of Utah, to try to pave the way for new budget negotiations.

Centrist Republicans said the proposals in Obama's budget didn't go far enough on entitlement cuts, but they credited him with living up to his commitment to GOP members to deal with entitlements.

"I think it's a start," said Sen. John Hoeven, R-N.D., adding he spoke with Obama about additional steps that could be taken.

But Republican leaders said they wouldn't accept the proposed new revenue in Obama's budget that would come largely from limits on tax breaks for upper-income earners.

Closing tax loopholes and limiting tax breaks for "well-off and well-connected" Americans would cut the deficit $580 billion and strengthen the economy, Carney told reporters Tuesday.

The tax reform would be part of a $1.8 trillion package to cut the deficit, he said.

But Republicans said they wouldn't agree to more tax revenue after the recent "fiscal cliff" deal that raised tax rates on annual household incomes above $450,000.

They also said too many parts of Obama's package were simply recycled proposals that have been floated and ignored for years.

"Apart from reports of a modest entitlement change -- and we'll need to see the details on that -- it sounds like the White House just tossed last year's budget in the microwave," Minority Leader Mitch McConnell, R-Ky., said on the Senate floor Tuesday.

The entitlement change includes pulling back on spending for programs including Social Security by using a less-generous formula than currently used for calculating cost-of-living increases.

The formula, known as chained CPI, or a chained consumer price index, is increasingly being discussed in Washington because many economists say it better measures inflation than the currently used CPI formula.

It tweaks the inflation formula slightly but results in big savings over the long run, perhaps more than $100 billion over a decade, The Washington Post reported. It also reduces the federal deficit through a combination of spending cuts and increased revenues.

The chained CPI formula would curb annual increases in many government programs.

Obama has said he is open to chained CPI as part of a "grand bargain" that would include spending cuts as well as new revenue.

He also is proposing $305 billion in Medicare cuts over a decade as part of a 10-year plan to cut the deficit $1.8 trillion -- provided Republicans agree to higher taxes.

But an advocacy group called the National Committee to Preserve Social Security and Medicare presented a petition to the White House Tuesday with 2 million signatures protesting the chained CPI formula.

It said the formula would hurt senior citizens, retired veterans and people with disabilities.

The advocacy group was joined by liberal Democrats who expressed unhappiness with what they called Obama's increasingly centrist position to secure bipartisan support for his proposals.

Carney told reporters the White House budget pairs chained CPI "with a proposal to protect vulnerable groups of citizens" from any disadvantage stemming from chained CPI.

The budget proposal also will reverse across-the-board spending cuts, known as sequestration, that began in March and replace them with changes to Medicaid, defense programs and farm subsidies.

At the same time, it will propose "ladders of opportunity" expenditures to help advance "those who are not in the middle class but aspire to be there," Carney said.

This would help "make sure that the middle class is growing," he said.

Republican National Committee Chairman Reince Priebus said Wednesday night's pizza dinner at the White House could be a symbolic harbinger.

"If we're lucky, maybe the pizza will serve to illuminate an important economic point for President Obama," Priebus said in a statement.

"Instead of redistributing the slices, the best way to make everyone happy is to make the pie bigger," he said. "It's as true for dinner as it is for economic growth and opportunity."


For more stories covering politics, please see HispanicBusiness' Politics Channel



Source: Copyright UPI 2013


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters