President Obama hasn't released his new budget yet, but a report from the Washington Post indicates that, when he does, it will be a clear sign of his desire to move Washington, D.C., away from years of deficit-obsessed austerity and focus instead on investing in those areas of society where government intervention is needed.
The most obvious hint that Obama is done seeking a debt-reducing grand bargain is the fact that, unlike a previous Obama budget, the president's latest proposal will not offer cuts to Social Security. "Obama will jettison the framework he unveiled last year for a so-called grand bargain that would have raised taxes on the rich and reined in skyrocketing retirement spending," reports the Post. While the White House has said the framework of a grand bargain deal that Obama outlined previously remains "on the table" it was nevertheless, in the Post's words, "time to move on."
“Over the course of last year, Republicans consistently showed a lack of willingness to negotiate on a deficit-reduction deal, refusing to identify even one unfair tax loophole they would be willing to close,” one anonymous White House official told the Post. The official went on to claim that Republican intransigence "is not going to stop the president from promoting new policies that should be part of our public debate.”
Obama would fully pay for proposed new spending in his budget request, administration officials said, including $56 billion for what they called “Opportunity, Growth and Security Initiative.” The package, which would be split between domestic programs and defense, will include fresh cash for 45 new manufacturing institutes; a “Race to the Top” for states that promote energy efficiency; new job training programs and apprenticeships; and expanded educational programs for preschoolers.
White House officials declined to say Thursday how they would fund the initiative. But Obama has in the past proposed limiting the value of income-tax deductions for wealthy households and closing a variety of corporate tax breaks.
A senior administration official said the budget would also propose new corporate tax rules aimed at preventing companies from moving profits overseas to avoid U.S. taxes. For instance, the rules will seek to limit a company’s ability to borrow domestically — and take large tax deductions on the interest — and then invest the money overseas.
Prohibiting corporations from gaming the tax code has been a popular issue among Senate Democrats and would help emphasize bread-and-butter themes in a year when Democrats will also be focusing on raising the minimum wage and other populist measures.