Politics
Obama Fiscal Year 2014 budget proposal to kick start deficit-reduction talks
It aims to achieve US$1.8 trillion in deficit reduction over 10 years. Added to the US$2.5 trillion in deficit cuts from past efforts, the total reduction would be more than the US$4 trillion both parties have said would be an acceptable goal.
The ratio of deficits to GDP would fall to 2.8 percent in 2016, below the 3 percent level economists say is necessary to put debt on a path to shrinking as a share of the economy.
The proposal revives Obama’s call that wealthier people help more with deficit reduction. It would require those making US$1 million a year or more to pay at least 30 percent of their income in taxes, after gifts to charity
Obama’s budget also included proposals to cap tax breaks for wealthier taxpayers, increase the estate tax and end the tax break for “carried interest,” profits earned by fund managers like those who run private equity and other investment firms.
Republicans, who are wary of any push to raise taxes after passing a rate increase for the wealthy at the beginning of this year, largely dismissed Obama’s proposal.
Boehner, Obama’s main opponent in deficit talks, said the president’s proposed cuts to entitlement programs such as Social Security were praiseworthy but not sufficient.
“I would hope that he would not hold hostage these modest reforms for his demand for bigger tax hikes,” Boehner said.
