President Obama's $3.9 trillion budget landed with an expected thud in the Republican-led House on Tuesday, while Senate Democrats praised the package as one that would create jobs, help low-income earners, and reduce the nation's huge deficit and debt.
Obama's plan echoes the Democratic Party's “income inequality” agenda that they are pushing ahead of the 2014 election -- It expands tax breaks for lower income earners while increasing taxes on the upper-middle class and the wealthy. The proposal also includes new stimulus spending and an expansion of federally funded preschool for the poor.
Democrats in Congress have been highlighting the party's income disparity theme with their own efforts to pass legislation to increase the minimum wage and restore expired federal unemployment benefits.
“This budget is a clear statement of our values as a nation, a nation that believes in fairness, opportunity, and hard work as the bedrock of our way of life,” House Minority Leader Nancy Pelosi, D-Calif., said.
For Republicans, the president’s annual spending blueprint represents another Democratic effort to increase spending by raising taxes.
House Speaker John Boehner, R-Ohio, called the plan Obama's “most irresponsible budget yet.”
So what’s the fate of Obama’s budget in Congress?
With the House firmly under control of Republicans and Senate Democrats too skittish to take up a bill calling for tax increases, the plan has little hope of serious consideration in Congress and is more likely to be used as a political tool for Obama as he works to rally the Democratic base.
House Budget Committee Chairman Paul Ryan, R-Wis., who is writing his own spending plan, said the proposal is akin to “a campaign brochure,” and he denounced it as a non-serious effort from Obama.
“It would demand that families pay more so Washington can spend more,” Ryan said.
Boehner, R-Ohio, sent a clear signal that Obama’s blueprint won’t see the light of day in the lower chamber.
“This budget is a clear sign this president has given up on any efforts to address our serious fiscal challenges that are undermining the future of our kids and grandkids,” Boehner said. “In the coming weeks, Republicans will produce a responsible budget that balances, promotes opportunity, reforms our tax code, saves our critical safety net programs, and places a priority on creating jobs, not more government."
Obama’s budget calls for raising taxes on upper-income earners in order to expand tax breaks for those who pay fewer taxes.
Democrats praised the plan. They believe the best path forward is to spend more federal money helping those in the lower end of the income scale and by authorizing new stimulus spending, which they have long sought because they believe it will create jobs.
The president’s plan includes such an approach, increasing federal dollars for infrastructure, including the repair of crumbling roads and bridges, and by expanding and extending the Earned Income Tax Credit.
Obama’s budget would pay the $302 billion price tag for infrastructure and the $60 billion cost of expanding the EITC by closing tax loopholes for corporations.
“I was especially glad to see the President propose paying for new investments in transportation infrastructure with revenue raised through reforming the bloated and loophole-ridden corporate tax code,” Senate Budget Committee chair Patty Murray, D-Wash., said.
Obama’s spending blueprint comes just a few months after the two parties came to a rare agreement on a budget plan authored by Murray and Ryan.
Republicans were quick to note that Obama’s proposal busts the caps put in place by Ryan and Murray and increases spending next year by $114 billion.
GOP lawmakers denounced the plan’s tax increases, which the top Republican on the Senate budget panel said will amount to $1.76 trillion.
“These astounding new taxes in reality will never happen, and provide a cover to mask the cost of the extraordinary new spending,” Sen. Jeff Sessions, R-Ala., said.
Sessions criticized the significant spending increases in the proposal and said it raises mandatory spending by 78 percent, while hiking Medicare and Medicaid spending by 73 percent.
Sessions called the budget, “an open declaration that reality doesn’t matter.”
The budget also drew criticism from Republicans angered over the proposed cuts to the military, which include reducing the size of the Army and cutting back on ships and aircraft.