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WASHINGTON – Six years into his presidency, President Barack Obama is sending Congress a budget that, for once, does not herald a partisan legislative showdown.
There’s no push to overhaul health care as he did in 2009, no drive as in 2010 to restrict Wall Street, no attempt to increase taxes as in 2011 and 2012, no move to halt automatic spending cuts as in 2013.
Politically speaking, this is a peacetime budget in an election year, when the most meaningful fights will take place during congressional campaigns, not on the floors or the House and Senate.
To the delight of Democrats, this will not be an austerity budget like last year’s. Then, Obama had proposed reducing annual increases in federal benefit programs, a step many Democrats found hard to fathom. The cut was part of Obama’s offer to Republicans for a long-term attack on the nation’s debt, through a mix of major tax increases and spending reductions.
Obama’s spending blueprint for the budget year that begins Oct. 1 proposes $56 billion in spending above the caps agreed to in a bipartisan deal from earlier this year. Under the plan, the extra spending would not add to the deficit because he proposes to pay for it with a mix of program cuts and eliminating tax breaks.
It proposes to bring in more revenue through stricter tax rules for U.S. companies having operations overseas and for foreign businesses with divisions in the United States. Those new rules, requiring congressional action, would tackle what the Obama administration considers tax avoidance schemes.
Both the spending and tax proposals are long shots for legislative action this election year. But they are part of a unifying theme for Democrats eager to distinguish themselves from Republicans before voters.
“Now, Republicans have a different view. Just last month, their party actually made it a part of their platform to let folks at the very top play by a different set of rules and avoid paying their fair share by stashing their money in overseas tax havens – a practice that also adds billions of dollars to our deficits every year.”
A day earlier, House Speaker John Boehner, R-Ohio, had offered a summary of his own of the Republican message.
“We’ve seen more and more that the president has no interest in doing the big things that he got elected to do,” Boehner said. “His budget apparently will make no effort to address the drivers of our debt and our deficit.”
His tax proposals include efforts to curtail what the administration views as tax avoidance schemes by U.S. companies with business overseas or by foreign-owned companies with operations in the United States.
One proposal would seek to limit the ability of companies to take advantage of differences in tax rules from country to country, administration officials said. A second would restrict the ability of multinational corporations to assign much of their debt to U.S. operations in order to take advantage of U.S. interest deductions. A third would classify as taxable the income from certain digital transactions that have been able to escape U.S. taxation.
The proposals are part of an international effort by leading economies to limit tax avoidance by multinational companies. Administration officials said the proposals in the budget would raise several billion a year and could be part of a broader tax overhaul that would be used to reduce corporate tax rates.
