Obama budget seeks boost for military, domestic programs

[January 30, 2015]  By Jeff Mason
 
 PHILADELPHIA (Reuters) - President Barack Obama will call for a 7 percent rise in U.S. domestic and military spending in his budget that would end caps known as "sequestration," the White House said on Thursday, setting up a new conflict with Republicans in Congress.

The fiscal 2016 budget, which the administration plans to unveil on Monday, would fund a host of programs that Republicans are unlikely to support.

It is the latest salvo by the Democratic president lobbed at a Congress controlled by the opposition party, and follows a defiant State of the Union address last week that critics said betrayed an unwillingness to seek compromise.

Obama maintained that tone during remarks to congressional Democrats in Philadelphia, promising not to remain on the sidelines during the last two years of his presidency and urging lawmakers to be unapologetic about backing progressive policies.

"Let's make sure that we end this across-the-board sequester," he said. "Let's make sure we're funding the things that we know help American families succeed."

The White House hopes it can find common ground with Republicans to prevent sequester cuts from going back into full force when the next fiscal year begins on Oct. 1.

Obama's budget, which is as much a political document as a fiscal road map, would do that by trimming "inefficient spending programs" and eliminating tax loopholes, a White House official said. It proposes a roughly 7 percent spending jump over the sequester limits.

That includes $530 billion in non-defense discretionary spending, which is $37 billion above the caps, and $561 billion in defense outlays, which is $38 billion above.

"This is the beginning of a negotiation," White House spokesman Josh Earnest told reporters. "We're certainly open to ideas that Republicans have."

The proposals got a quick brush-off from Republican Senate Majority Leader Mitch McConnell's office, which noted the administration tried unsuccessfully to do away with the cuts before.

"Previous budgets submitted by the president have purported to reverse the bipartisan spending limits through tax increases that the Congress, even under Democrats, could never accept," said Don Stewart, McConnell's deputy chief of staff.

The automatic spending cuts went into effect in 2013, but were lessened in 2014 and 2015 under a bipartisan bill negotiated by Democratic Senator Patty Murray of Washington state and Republican Representative Paul Ryan of Wisconsin.

That compromise bill ends with the current fiscal year on Sept. 30.

A spokesman for Republican House of Representatives Speaker John Boehner said Obama's solution of raising taxes for some would not fly.

"Republicans believe there are smarter ways to cut spending than the sequester and have passed legislation to replace it multiple times, only to see the president continue to demand tax hikes," said Cory Fritz. "Until he gets serious about solving our long-term spending problem, it’s hard to take him seriously."

Obama's budget also will include $1 billion in new aid for Central America. The money is meant to address conditions that led to an influx into the United States last year of tens of thousands of illegal migrants, including more than 60,000 children traveling without their parents.

The budget will likely propose spending increases to help fund infrastructure projects, as well as research and development initiatives. Following through on Obama's State of the Union address, it will propose raising taxes on the wealthy to cover tax credits and educational programs for the middle class.

That drew praise from Democrats.

"The president’s plan to replace the sequester with a budget that creates jobs and opportunities for the middle class is just what the American people need," said House Democratic leader Nancy Pelosi.

(Additional reporting by Richard Cowan in Philadelphia and Patricia Zengerle in Washington; Editing by James Dalgleish, Andre Grenon and Lisa Shumaker)

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