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Obama's budget targets the wealthy

President Barack Obama's next planned budget will hit America's wealthy with higher taxes to help cut 4 trillion dollars from the country's deficit over the next 10 years.

His 3.8 trillion dollar election-year budget - as much a political document as spending plan - sets him apart from Republicans opposed to higher taxes and believing the only way to cut government debt is to slash the heavy burden of social programmes, particularly the federal Medicare health insurance program for Americans at age 65.

The budget frames and probably will intensify the deep partisan divisions that have kept Washington in gridlock since Republicans regained majority control of the House of Representatives in the 2010 election.

The president would achieve 1.5 trillion dollars of the deficit reductions in tax increases on the wealthy and by removing certain corporate tax breaks. Mr Obama rejected Republican charges of class warfare. "This is not about class warfare. This is about the nation's welfare," he insisted.

In a message that repeated populist themes Mr Obama also sounded in his State of the Union address, the president defended his proposed tax increases on the wealthy, saying it was important that the burden of getting deficits under control be a shared responsibility.

While administration officials defended the overall plan as a balanced approach, Republicans found ready material for attacks, particularly over Mr Obama's failed 2009 promise to cut the skyrocketing deficit in half by the end of his first term.

The debate is almost certain to go all the way to election day in November, with stalemate 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 November elections and the following January, when newly elected officials take their seats in Congress. Depending on the outcome of the presidential race, Mr Obama, too, could be facing a departure from the White House in January.

Mr Obama's spending blueprint for the budget year that begins on October 1 projects a deficit for this year of 1.33 trillion dollars. That would mean four straight years of trillion-dollar-plus deficits.

The budget projects a decline in the deficit to 901 billion dollars in 2013 and continued improvements shrinking the deficit to 575 billion dollars in 2018. It puts forward 1.5 trillion dollars in new taxes, primarily by allowing tax benefits to expire at the end of this year for families earning 250,000 dollars or more per year.

Mr Obama 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 people earning more than 1 million dollars annually pay at least 30% of their income in taxes.


From Belfast Telegraph