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 The budget foresees a $474 billion deficit, which is 2.5 percent
of U.S. gross domestic product. It projects deficits stabilizing at
that rate over a 10-year period, senior administration officials
said.
Obama's budget fleshes out proposals from his State of the Union
address and helps highlight Democratic priorities for the last
quarter of his presidency and the beginning of the 2016 presidential
campaign.
But it is as much a political document as a fiscal road map and
would require approval from the Republican-controlled Congress to go
into effect.
"Our hope is that by laying out ... a clear economic vision centered
around the middle class and economic growth, that we’ll be able to
have a productive conversation (with Republicans) and make progress
over the course of the year," an administration official said on
Sunday, previewing the budget's release.
Republicans have said they see room for compromise in areas such as
tax reform and infrastructure, but many of Obama's programs, which
were rolled out in the weeks before the budget's release, have
landed with a thud.
"When ... he devotes his time and energy to talking about the new
tax-and-spend policies that progressives like and Republicans
universally oppose, he signals to Congress that he is once again
looking to argue rather than to legislate," said Keith Hennessey, a
former economic adviser to Republican President George W. Bush.
Democrats, however, viewed the budget as a statement of their
priorities and a chance to demonstrate they represent the party that
champions middle-income Americans.
"(It) affords him an opportunity to contrast his vision of helping
the middle class with the Republican Congress' approach of
exacerbating inequality, ignoring the middle class and making the
burdens of those who want to enter it even greater," said Neera
Tanden, president of the Center for American Progress, which has
close ties to the White House.
INFRASTRUCTURE, TAX REFORM
The budget achieves some $1.8 trillion in deficit reduction over the
next 10 years, officials said, through healthcare, tax and
immigration reform, but the forecast assumes Republican support for
Obama's programs, which is unlikely.
Republicans have blocked immigration reform legislation in the House
of Representatives, for example, and the budget assumes passage of
such a bill.
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The administration foresees a continuation of the decline in
unemployment, forecasting a rate of 5.4 percent in 2015. The rate
currently stands at 5.6 percent.
It also proposes a new infrastructure bank, a 6 percent increase in
research and development, and a controversial consolidation of U.S.
government agencies. Obama has previously proposed combining trade
agencies, but the proposal fizzled.
The budget sets aside $14 billion to strengthen U.S. cybersecurity
defenses after a spate of high-profile hackings.
It calls for a one-time, 14 percent tax on an estimated $2.1
trillion in profits piled up abroad by companies such as General
Electric <GE.N> and Microsoft <MSFT.O>, while imposing a 19 percent
tax on U.S. companies' future foreign earnings.
It proposes a 7 percent rise in U.S. domestic and military spending,
ending "sequester" caps with reforms to crop insurance programs and
closing tax loopholes such as one on "carried interest." Those moves
would help fund investments in infrastructure and education.
The budget would also reform rules governing trust funds and raise
the capital gains and dividend rates to 28 percent from the current
top rates of 23.8 percent.
In foreign policy, the budget funds efforts to defeat Islamic State
militants and support NATO and European allies against Russian
aggression, the White House said.
(Reporting by Jeff Mason; Editing by Peter Cooney)
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