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Wednesday 13 December 2017

Obama set for Congress budget clash

President Barack Obama's new 4 trillion US dollars budget plan is distributed by the Senate Budget Committee. (AP)
President Barack Obama's new 4 trillion US dollars budget plan is distributed by the Senate Budget Committee. (AP)

President Barack Obama is setting up another clash with Republicans by sending Congress a budget that seeks to raise taxes on wealthier Americans and corporations and increase domestic spending,.

Republicans, who now control all of Congress, accused the president of seeking to revert to tax-and-spend policies that will harm the economy while failing to do anything about the budget's biggest problem - soaring spending on government benefit programmes.

The Obama administration said the 4 trillion US dollars (£2.66 trillion) budget represented a strategy to strengthen the middle class and help "hard-working families get ahead in a time of relentless economic and technological change".

President Obama's budget emphasises the same themes as his State of the Union address last month, when he challenged Congress to work with him on narrowing the income gap between the very wealthy and everyone else.

"This country's better off than it was four years ago, but what we also know is that wages and incomes for middle class families are just now ticking up," Mr Obama said in an interview broadcast on Monday's Today Show on NBC.

"They haven't been keeping pace over the last 30 years compared to, you know, corporate profits and what's happening to folks in the very top."

President Obama is releasing his budget as the economy improves, the federal deficit drops and his poll numbers climb higher.

His new budget offers an array of spending programs and tax increases on the wealthy that Republican lawmakers have already rejected.

But it puts Republicans in the politically awkward position of rejecting tax cuts for middle-class families.

The president also wants to give a huge boost to spending on infrastructure, funded by a one-time tax on profits US companies have amassed overseas.

President Obama would ease tight budget constraints imposed on the military and domestic programmes back in 2011, when attempts at a bipartisan budget deal failed.

His budget will propose easing those painful, automatic cuts to the military and domestic agencies with a 7% increase in annual appropriations.

Many Republicans support the extra military spending but oppose increased domestic spending. Republicans control both houses of Congress for the first time in President Obama's presidency.

Obama's fiscal blueprint, for the budget year that begins October 1, would leave a deficit of 474 billion US dollars (£315bn). Mr Obama's budget plan never reaches balance over the next decade and projects the deficit would rise to 687 billion US dollars (£456bn) in 2025.

Press Association

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