“Congress didn’t do a great job last year. It drove right to the edge of the cliff on occasion after occasion,” Lew said. “A lot of that was because of the extreme conservative approach taken by House Republicans.”
According to a White House fact sheet, Obama’s budget will adhere closely to the approach he outlined in September in a submission to the congressional “supercommittee” that failed to agree on at least $1.2 trillion in additional spending cuts to keep across-the-board cuts from taking effect next January.
The Obama budget sticks to the caps on annual appropriations approved in August that will save $1 trillion over the next decade. It also puts forward $1.5 trillion in new taxes, primarily by allowing the Bush-era tax cuts expire at the end of this year for families making $250,000 or more per year.
Obama, as he has in the past, also proposed eliminating tax deductions the wealthy receive and would also put in place a rule named for billionaire Warren Buffett that would seek to make sure that households making more than $1 million annually pay at least 30 percent of their income in taxes.
Obama would also impose a new $61 billion tax over 10 years on big banks aimed at recovering the costs of the financial bailout and providing money to help homeowners facing foreclosure on their homes.
It would raise $41 billion over 10 years by eliminating tax breaks for oil, gas and coal companies and claims significant savings from ending the wars in Iraq and Afghanistan.
Lew said the budget would cut spending by $2.50 for every $1 in extra taxes it seeks.
“In the long run, we need to get the deficit under control in a way that builds the economy,” Lew said. “We do it in a way that’s consistent with American values so that everyone pays a fair share.”
Among the areas targeted for increases, Obama is proposing $476 billion in increased spending on transportation projects including efforts to expand inner-city rail services.
To spur job creation in the short-term, Obama is proposing a $50 billion “upfront” investment for transportation, $30 billion to modernize at least 35,000 schools and $30 billion to help states hire teachers and fire, rescue and police.
Republicans in Congress, opposed to further stimulus spending, have blocked these efforts.
The Obama budget seeks $360 billion in savings in Medicare and Medicaid mainly through reduced payments to health care providers, avoiding tougher measures advocated by House Republicans and the deficit commissions that said restraining health care costs will be critical in the future.