Obama: Budget won’t add to deficit

President Obama hailed his budget proposal on Wednesday as a blueprint that will help grow the economy but does not “add a dime” to the nation’s deficits.

{mosads}In a statement in the Rose Garden, Obama said his main goal in his proposal is to “reignite the true engine of the economy” — the middle class. He cast his budget as a fiscally responsible plan for job creation and growth. 

But he also sought to send a strong message that his proposal will also help reduce the deficit, hoping to insulate himself from criticism by Republicans. 

“This budget answers that argument because we can do both,” Obama said of growing the economy while shrinking the deficit. “These are not conflicting ideas. We can do them in concert … nothing shrinks deficits faster than a growing economy.” 

The White House said Obama’s $3.77 trillion budget blueprint would reduce the deficit by $1.8 trillion over 10 years. It would also raise more than $580 billion in new taxes from top earners. 

“The numbers work,” Obama added in response to his critics. “There’s not a lot of smoke and mirrors in here.” 

Obama includes $210 billion in reduced interest payments on the debt to reach the $1.8 billion figure. He also uses a baseline that doesn’t include the automatic spending cuts known as the sequester. 

Obama’s budget turns off those cuts. If the cuts were kept in place, there would be less discretionary spending than what Obama proposes for 2014.

The president said his proposal would replace the “foolish across-the-board- spending cuts” in the sequester — which went into place last month — with “smarter ones.”

Obama does not propose to balance the budget, but he would reduce the size of the deficit as a percentage of gross domestic product. 

The House Republican budget would balance, and the budget proposed by Senate Democrats would cut more into the deficit, partly because it includes higher taxes. 

House Republican leaders on Wednesday criticized Obama for conditioning the entitlement reforms in his budget on GOP support for higher taxes. 

They said Obama shouldn’t hold entitlement reform “hostage” in the debate over tax revenues. 

“While the president has backtracked on some of his entitlement reforms that were in conversations that we had a year and a half ago, he does deserve some credit for some incremental entitlement reforms that he has outlined in his budget,” Speaker John Boehner (R-Ohio) told reporters Wednesday after a Republican conference meeting. 

Obama said he had already met Republicans “half way” on deficit reduction.  

“Despite all the noise in Washington, here’s a clear and unassailable fact: our deficits are already falling,” he said. 

Obama’s blueprint includes a proposal for “chained consumer price index” — a less generous formula for calculating inflationary hikes to government programs, including Social Security and Medicare.

Addressing criticism from Democrats about the plan, Obama said he didn’t believe all the ideas are “optimal.” 

But Obama added, “I’m willing to accept them as part of a compromise.”

“If we want to keep Medicare working as well as it has, we have to make some changes … but they don’t have to be drastic,” he said. 

“Our economy is poised for progress, as long as Washington doesn’t get in the way,” the president added. 

This story was posted at 11:37 a.m. and last updated at 12:22 p.m.

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