Obama outlines his budget wish list

WASHINGTON—President Barack Obama on Monday continued his bare-knuckles approach to governance after his party’s November losses, unveiling a litany of progressive agenda items in a record $4 trillion budget proposal.

Rather than move toward Republicans, Obama’s budget plan continued his leftward veer, asking Congress to end budget cuts he agreed to in 2011, approve a $478 billion public works program, and increase taxes again on wealthy Americans.

“A proposal that never balances is not a serious plan for America’s fiscal future,” said House Speaker John Boehner, R-Ohio, who said the budget Republicans will release this spring will balance in 10 years.

Obama trumpeted the shrinking federal deficit less than two weeks ago in his State of the Union address, but it has yet to recede to levels seen during the George W. Bush administration, which were then historically high. Obama’s new proposal would increase spending by 6.4 percent in fiscal year 2016, which begins Oct. 1. Last week the Congressional Budget Office projected even with recent budget cuts the federal deficit will again top $1 trillion annually by 2025, adding some $7.6 trillion to the national debt during the next decade.

Obama’s budget recommends ditching recent reductions, known as sequestration, implemented in the Budget Control Act of 2011. He called the cuts “mindless austerity” and urged Congress to break the caps by $74 billion in 2016 and $362 billion over the remaining six years of the deal.

Many Republicans have also blasted sequestration cuts, especially since they disproportionately hit the military, but conservatives have said they will not break the spending caps without making corresponding cuts elsewhere.

Obama touted his budget in a Monday visit to Department of Homeland Security headquarters in Washington, warning Republicans he would not sign a budget that does not fund his recent executive actions on immigration.

“I will not accept a budget that severs the vital links between our national security and our economic security,” Obama said. “Those two things go hand in hand.”

The White House has incrementally rolled out parts of the budget proposal over the last several weeks, meeting with mixed reviews from the right and the left. Among other things, Obama floated the idea of ending 529 college savings plans but dropped it amid widespread criticism—including from Minority Leader Nancy Pelosi, D-Calif.

Obama intends to pay for new programs (and a middle-class tax cut) with a $320 billion tax increase on wealthy individuals and corporations, a $95 billion cigarette tax increase, and almost $500 billion in revenue increases as a result of his immigration changes.

Obama also proposed a 28 percent cap on deductions for charitable donations, which the American Enterprise Institute estimated would cost charities $9.4 billion in a single year.

“We encourage the president to reevaluate his insistence on capping the charitable deduction, which is a lifeline for Americans in need and not a taxpayer loophole,” said Sandra Swirski, executive director of the Alliance for Charitable Reform. “ACR will continue to work with our colleagues in the sector to educate our elected officials on the unique nature of the charitable deduction.”

Swirski said the proposal sends mixed messages about the importance of charitable giving: While disappointed by the cap, she said ACR is encouraged the president’s proposal would exempt assets donated to charity from an increase in capital gains taxes. The so-called Buffet Rule proposal institutes a minimum 30 percent tax on incomes above $1 million, but charitable donations would provide credit against taxes owed.

Obama’s plan launches the budget debate for fiscal 2016, but it has virtually no chance of becoming law with Republicans controlling both the House and the Senate.

Rep. Bill Flores, R-Texas, chairman of the conservative Republican Study Committee, called the proposal a “retread” of the unsuccessful 2009 stimulus: “The fact is Americans are making less and paying more as a result of President Obama’s failed policies. … These programs will not spur the economic growth and vitality America needs, they will only further mortgage away the next generation’s economic future.”