The White House says those investments would “construct an economy that is built to last.” But they would also keep annual budget deficits above or hovering near $1 trillion for a fifth straight year.
Congressional Republicans seized upon the deficit projections when they were released Friday, noting that Obama has failed to keep a 2009 promise to cut the deficit in half by the end of his first term. The 2009 deficit was $1.4 trillion; Obama is projecting a $1.33 trillion deficit this year and a $901 billion budget gap in 2013.
During appearances on all five major Sunday talk shows, Lew, who served until recently as Obama’s budget director, refused to acknowledge that lapse, arguing that Obama had been forced to take expensive action to shore up an economy in far worse shape than anyone had imagined. While debt-reduction remains a top priority for the president, Lew said, it would be a mistake to cut too much too fast.
“The American people should be pleased that we now have a recovery that’s taking root,” Lew said on NBC’s “Meet the Press.” “The thing that we have to be careful about is to make sure that Washington doesn’t get in the way.”
Obama is set to unveil his 2013 spending plan Monday morning on the Annandale campus of Northern Virginia Community College, a venue chosen to highlight his proposed investments in a skilled workforce. The event kicks off an election-year budget season important primarily as a forum for drawing a contrast between Obama and his low-tax, small-government Republican opponents. Senate Democratic leaders have said they have no intention of adopting a budget this year.
Obama’s spending plan, which mirrors recommendations he made in September to the congressional debt-reduction “supercommittee,” would lead to significantly lower deficits in the years ahead, according to White House officials, and would trim future borrowing by more than $4 trillion over the next decade. That sum includes an agreement last summer to cut $1 trillion from agency budgets.
Of the new savings, $1.5 trillion would come from higher taxes on corporations and the wealthy, including the expiration of the George W. Bush tax cuts on income over $250,000 a year. An additional $278 billion would come from a hodgepodge of cost-saving maneuvers, such as charging higher premiums for federal pension insurance, asking federal workers to contribute more to their own retirement and cutting federal farm subsidies. About $850 billion would come from capping spending on the wars in Iraq and Afghanistan, though about $200 billion of those savings would be redirected to new road and rail projects.