THE White House has proposed a budget that would sharply trim the US deficit over three years by forcing millionaires to pay more in taxes and enact spending cuts to replace the 'sequester' reductions which went into place last month.
President Barack Obama's fiscal 2014 budget blueprint ensures that those making $1m (€760,000) a year or more would have to pay at least 30pc of their income, after gifts to charity, in taxes, officials said.
That increase, along with spending cuts and a 28pc cap on tax deductions for high earners, would bring the US budget deficit down to 2.8pc of GDP by 2016, senior administration officials told reporters.
The non-partisan Congressional Budget Office projected in February that the US deficit would be 5.3pc of GDP this year.
The president's budget stands little chance of being enacted into law. However, senior administration officials said that in spite of Republican leaders' resistance to tax increases, they hoped it could lead to a deficit-reduction accord.
"There continue to be people who are on the Republican side, in the Senate at least, who are saying things that would give you some hope that there is a path to a deal," a senior administration official told reporters.
The president is breaking from the tradition of using the largely symbolic budget release to outline his ideal tax and spending proposals.
Instead, he is trying to relaunch talks to resolve a long-running fiscal battle with his Capitol Hill adversaries.
To do so, Mr Obama is offering a concession that has enraged many of his supporters: adopting a less generous measure of inflation to calculate cost-of-living increases for the beneficiaries of many federal programmes.
One result would be diminished benefits for most recipients of the popular social security retirement programme.
Although Mr Obama has pledged to shield some of the most vulnerable beneficiaries, the proposal has drawn strong opposition from Democrats and groups representing labour and the elderly.
At the same time, his budget proposal faces seemingly insurmountable opposition from Republican leaders, who reject any new tax revenues.
Obama's hope is to build a coalition of lawmakers willing to compromise, although most observers see that as unlikely.
He has invited 12 Republicans to dinner at the White House in an effort to soften resistance.
"The question is, are Republicans going to be willing to come to us to do the serious thing that they say is so important in terms of reducing our deficit," a senior administration official told reporters the day before the budget release. (Reuters)