Washington (AFP) – President Barack Obama on Tuesday proposed a budget for the coming fiscal year that had less to do with managing U.S. finances than with stemming Democratic losses in congressional elections.
The mildly expansionary $3.9 trillion plan will not pass Congress unscathed, but Obama will use it as a platform to underline his populist voter-friendly narrative ahead of the November polls.
“Our budget is about choices. It is about our values,” Obama told supporters, in a speech at a Washington elementary school.
“As a country, we have to make a decision, if we are going to protect tax breaks for the wealthiest Americans, or create jobs, grow our economy, and expand opportunity for every American.”
Senior White House officials admit the document is largely aspirational, given that the president’s top priorities are routinely blocked by Republicans in Congress.
Broad spending levels have also already been set by a two year budget agreement reached by top Democratic and Republican negotiators in Congress in December.
But Obama will use the budget to showcase ideas that he thinks will give him, and his beleaguered supporters in Congress, the edge.
He proposed an extra 56 billion dollars in spending above agreed budget levels, to be financed by closing tax loopholes which benefit the rich and in mandatory spending reform.
The budget foresees the American economy growing by 3.1 percent this year and by 3.4 percent the next, with inflation remaining under control, rising to only 2.0 percent in 2015.
It also predicts growing revenue, so that the government can reach a primary surplus — spending excluding debt service — by 2018.
It suggests the country’s budget deficit, which boomed after the 2008 crisis, can be brought down to $564 billion, or 3.1 percent of GDP, in the fiscal year beginning October 1 and to 2.2 percent by 2020.
While the absolute level of U.S. debt — now $17.3 trillion — will continue to grow, its ratio to the overall size of the economy will fall, from nearly 75 percent this year to 69 percent by 2024.
The White House said the budget would expand the Earned Income Tax credit, which would cut taxes for 13.5 million working Americans and expand tax cuts to finance child care and college education.