Obama unveils $3.77tn budget proposing fresh taxes on wealthy

PanARMENIAN.Net - U.S. President Barack Obama has unveiled a $3.77tn budget that proposes fresh taxes on the wealthy along with cuts to benefit programs, according to BBC News.

The White House is offering to trim pensions and healthcare costs, but only in return for $700bn in new revenue. However, the Obama plan is viewed as having no chance of being fully enacted by the deadlocked Congress.

Conservatives have refused to agree to new revenue after passing tax rises on earnings over $400,000 in January. Congressional Democrats, meanwhile, have balked at Obama's compromise offer to cut Social Security pension payments.

Obama's budget aims to reduce the U.S. deficit by an additional $1.8tn over 10 years, bringing total potential reductions to $4.3tn, according to administration estimates.

Cuts in the plan include about $400bn to government health spending, and about $130bn from Social Security, by changing the way cost-of-living adjustments are calculated.

Elderly and disabled recipients with the lowest incomes would be shielded from the changes.

The cost-of-living adjustments would also raise $100bn in revenue over 10 years through changes to tax brackets.

Additional cuts would include $100bn each from military and domestic programs as well as reductions in farm subsidies and federal employee pension programs.

Obama proposes raising revenue by eliminating income deductions for the top 2% of earnings and includes the president's oft-repeated Buffett Rule, requiring households with incomes of more than $1m to pay at least 30% in taxes.

The plan also includes some new spending aimed at improving the U.S. economy, including $50bn in infrastructure and $1bn for 15 manufacturing institutes across the country.

Negotiations over the next U.S. budget are expected to run into the summer, but the White House says the document released on Wednesday is not an opening offer.

"I have already met Republicans more than half way," Obama said in the White House Rose Garden.