Obama sends Congress $3.8 trillion budget plan

WASHINGTON (TIP): President Barack Obama sent Congress a $3.8 trillion budget plan that hopes to tame galloping deficits by raising taxes on the wealthy and trimming America’s most popular benefit programs. In aiming for a compromise between Republicans who refuse to raise taxes and Democrats who want to protect those benefits, he’s upset some on both sides. The White House wants to break away from the current cycle of moving from one fiscal crisis to another while the government skirts the brink of a shutdown.

Deep political divisions have blocked substantial agreements to address the country’s gaping debt. It’s unlikely that Congress will begin serious budget negotiations before summer, when the government once again will be confronted with the need to raise its borrowing limit or face the prospect of a first-ever default on US debt.

Obama on Wednesday night hosted a private dinner at the White House with a dozen Republican senators as part of efforts to win over the opposition. Republican Sen. Johnny Isakson said in a statement, “Sitting down to talk about how to get our arms around our debt is a good first step to what I hope will be an ongoing discussion and a path forward to solving our nation’s problems.” The president’s budget proposal includes $1.8 trillion in new deficit cuts as the US tries to wrestle down its debt. The last time the government ran an annual surplus was in 2001, the year of the 9/11 attacks that led to the wars in Afghanistan and Iraq. The Treasury Department said the US deficit was on pace to finish below $1 trillion for the first time in five years. The deficit hit a record $1.41 trillion in budget year 2009.

Obama’s budget blueprint for 2014 assumes that Washington reverses the recent deep budget cuts that have become a daily reality for the military. It calls for a base Defense Department budget of $526.6 billion and $52 billion more than the level established by the blunt spending cuts, which had been designed to force the White House and Congress to reach a fiscal deal to avoid them. The budget plan includes an $88.5 billion placeholder for additional war costs in Afghanistan as Obama decides on the pace of the drawdown of US combat troops next year.

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