Obama: $4 trillion budget replaces 'mindless austerity'

Show Caption Hide Caption Obama unveils $3.99 trillion budget President Obama's $3.99 trillion budget aims to help working class families, but Republicans say this isn't the way to do it.

WASHINGTON — President Obama submitted his $4 trillion budget wish-list to a Republican Congress Monday, calling for a return to increased domestic and military spending to be paid for in part by higher taxes on the wealthy.

The plan includes a $478 billion public works infrastructure program for roads, bridges, and transit systems, to be financed by taxes on overseas earnings. The budget calls for new tax credits and other initiatives devoted to education, child care, paid leave, and infrastructure, with tax hikes resulting from the closure of tax loopholes. The president also wants to put an end to the automatic across-the-board spending cuts known as sequestration, calling for a 7% increase in spending over the budget levels he agreed to in a 2011 compromise with Republicans.

"I want to work with Congress to replace mindless austerity with smart investments that strengthen America," Obama said in a speech at the Department of Homeland Security. "I'm not going to accept a budget that locks in sequestration going forward. It would be bad for our security, and bad for our growth."

Republicans spared no rhetorical flourish in deriding the budget proposal. Senate Majority Leader Mitch McConnell, R-Ky., called it "another top-down, backward-looking document that caters to powerful political bosses on the Left and never balances— ever." House Majority Whip Peter Roskam, R-Ill., compared it to the Seattle Seahawks' disastrous second-and-goal pass in Sunday's Super Bowl.

And more than a few Republicans noted that the budget release deadline happened to fall on Groundhog Day, suggesting a sense of deja vu in Obama's budget.

Modern presidential budget proposals are as much political documents as accounting ones, often declared "dead on arrival" in Congress by opposing political parties. The result has been a series of spending bills funding the government temporarily.

Congress has funded the federal government through the end of the fiscal year in September, with one exception: The Department of Homeland Security. Republicans want to attach conditions on DHS spending that would roll back Obama's executive actions that would defer low-priority deportations for for immigrants not authorized to be in the United States.

Monday, Obama went to the DHS headquarters to tour its operations center and call on Congress to fund the department — and in so doing attempted to cast his economic proposals as vital to national security. He said thousands of Border Patrol agents, airport security screeners, customs personnel, Coast Guard members, and Secret Service agents won't get paid if spending authority expires at the end of the month.

"We need to put politics aside, pass a budget that funds our national security priorities at home and abroad and gives middle class families the security they need to get ahead in the new economy," Obama said. "This is one of our most basic and most important responsibilities of our government."

But Republicans said Obama was the one playing politics with the budget. "Americans are looking for real solutions, not political stunts," said Cory Fritz, a spokesman for House Speaker John Boehner, R-Ohio. He said the House bill funds the Department of Homeland Security while blocking Obama's "executive overreach" on immigration.

Though Republicans dismissed the budget, White House officials said they remain optimistic that individual proposals could still get GOP support.

"The bottom line is infrastructure is traditionally a bipartisan issue," said Jeff Zients, director of the National Economic Council. "Everyone agrees our infrastructure is outdated and needs to be modernized. It's also a twofer in that it supports good paying jobs, good-paying middle class jobs right away and at the same time it sets us up for long-term competitiveness in this global marketplace."

The proposed infrastructure program — $478 billion over six years for roads, bridges and other transit systems — would be financed by a one-time 14% tax on overseas profits, according to the budget.

The budget also includes defense spending of $561 billion, some $38 billion over sequestration levels. Defense priorities include the fight against the Islamic State in Iraq and Syria, resisting Russian aggression in Ukraine, and a "good governance" project in Central America. There, too, the White House hoped to find common ground with Republicans who were always less enthusiastic about the impact of across-the-board budget cuts on defense spending.

"I also think it's important to remember that national security is dependent on more than just the Department of Defense budget," said Shaun Donovan, the White House budget director. "In fact, in the non-defense category is all of the commitments we've made to our veterans. It includes the homeland security budget, which obviously is a critical part of protecting our country."

The projected deficit for Obama's proposed budget is $474 billion. Even given a 10-year budget window, Obama's budget does not balance, and the total national debt would increase from $18.1 trillion today to $26.2 trillion by 2025. But Donovan noted that as a share of gross domestic product, the deficit would under 3%, and "it starts to bend that curve on debt so it stabilizes and then begins to reduce debt" in relation to the size of the economy.

The budget proposes to raise tax revenue by closing loopholes on items involving carried interest, capital gains and trust funds.

Recent years have seen a government shutdown, near-shutdowns and a debt limit crisis, ending with the passage of resolutions that fund the government temporarily, as opposed to a specific budget.

Anyone involved in the process "would acknowledge that this is the beginning of a negotiation," said White House spokesman Josh Earnest. "But it's important — budgets are important because they're a way that we can codify our values and our priorities."

Among the economic plans in the proposed budget:

• An expanded child care tax credit of up to $3,000 a child.

• $750 million for a Department of Education preschool development program, an increase of $500 million.

• More than $3 billion for science, technology, engineering and math (STEM) education.

• A $500 tax credit for "second earners" in working families.

• A $2.2 billion grant program that would encourage states to adopt paid leave programs for employees

• Two years of community college tuition for qualified students, a program that would cost $60 billion over 10 years.

• $1 billion for a "long-term, comprehensive strategy" to develop a Central America "that is fully democratic (and) provides greater economic opportunities."