The Fight Begins: Obama's Budget Going To Congress

MARTIN CRUTSINGER

WASHINGTON (AP) — The new budget that President Barack Obama is sending to Congress aims to achieve $4 trillion in deficit reduction over the next decade by restraining government spending and raising taxes on the wealthy. To help a weak economy, Obama's proposal Monday requests increases in transportation, education and other areas.

While administration officials on Sunday defended the plan as a balanced approach, Republicans belittled the effort as a repeat of failed policies that did too little to attack soaring costs in such programs as Medicare and threatened growth by raising taxes.

The debate is almost certain to go all the way to Election Day in November with gridlock 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.

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

The budget will project a decline in the deficit to $901 billion in 2013 and continued improvements shrinking the deficit to $575 billion in 2018.

Republicans said Obama's plan was a stark reminder that the Democratic president had failed to meet the pledge he made after taking office in 2009 to cut the deficit in half by the end of his first term.

But Jacob Lew, Obama's chief of staff, said the administration had to contend with a deep recession and soaring unemployment that had driven the deficits higher than anyone anticipated. He said Obama's plan would cut the deficit below 3 percent of gross domestic product by 2018, to levels that economists generally view as sustainable.

He said faster deficit cuts now would set back an economy still struggling with high unemployment. Lew, Obama's former budget chief, also said it was critical that Congress agree to extend a payroll tax cut due to expire at the end of February. Failure to extend it, he said, would cause another hit to the economy.