The U.S. president, Barack Obama, plans to present his budget proposal Wednesday for fiscal year 2014, a plan that includes spending cuts in social programs in an attempt to win the support of Republicans and more taxes on households millions of middle class families.
With Obama’s plan for fiscal year 2014, which runs from October 2013 to September 2104 – the White House seeks to achieve a deficit reduction of $ 1.8 trillion over the next decade.
The intention of the presidency is to supposedly get the deficit, which this year is expected to reach 5.5% of gross domestic product (GDP), to 4.4% in 2014 and to 2.8% in 2016, according official statistics.
Obama’s plan includes more than two dollars of spending cuts for every dollar that the state expects to collect by reducing tax breaks to people the administration calls the rich, but that in reality are part of the lower and middle classes.
It is “to show that it is possible to reduce the deficit in a balanced way and continue to invest in creating jobs for the middle class,” said a senior official on Tuesday at the White House in a conference call with reporters.
“The question is whether Republicans are willing to work with us to reduce the deficit,” he added.
In order to reach an agreement with Republicans, Obama’s offer includes a cut of 400,000 million dollars in the health program for the elderly and retirees known as Medicare, even though he promised not to raise taxes or cut social spending before and after he was elected.
It also provides for a reduction of 200,000 million in retirement benefits, as well as another 200,000 million in cuts to so-called “discretionary” spending, 50% of which will be applied to the defense budget.
On the other hand, Obama hopes to get 580,000 million in new revenue through what he calls ‘tax reforms’.
Basically the government is using the infamous Buffett rule, inspired by billionaire Warren Buffett that establishes that households who enter more than $ 1 million a year should have a tax burden of at least 30%. While this happens, people such as Buffet himself are given billion dollar tax exemptions and are allowed to send money offshore to evade the payment of personal and corporate taxes.
In theory, Obama’s plan includes an investment of 50,000 million for infrastructure projects and another 1,000 million for the creation of 15 institutes dedicated to enhancing manufacturing. Also, the president seeks more funding for preschool through increased federal taxes.
The White House spokesman, Jay Carney, recalled Tuesday that Obama’s plan would end the automatic spending cuts totaling $ 1.2 trillion over 10 years running since March and that they were designed as a measure of pressure to force a budget agreement.
On the other hand, the Republican budget plan, devised by the legislator and former candidate for vice president Paul Ryan, includes reducing spending on dozens of programs for the poor, repeal health care reform signed into law by Obama in 2010 and partially privatize Medicare.
Choose your poison.