REUTERS - President Barack Obama weighed into Washington's budget wars on Wednesday with a third entry that offers Republicans a modest concession on entitlement programs but demands that the wealthy pay more in taxes.
His fiscal 2014 budget request is closer in most respects to the modest budget savings passed by Senate Democrats last month than to the deep cuts passed by the Republican-controlled House of Representatives aimed at achieving a surplus by 2023.
Here's how the three budget plans compare in key areas:
DEFICITS
Obama: Projected deficits are slightly higher than the Senate plan in the early years of the next decade and never dip below $475 billion. But they are lower than the Senate plan in later years and average 2.5 percent of gross domestic product over 10 years. Cumulative deficit is $5.27 trillion.
Senate: Deficits fall to around $400 billion by 2016 and stay in the $400-$600 billion range, averaging 2.4 percent of GDP over 10 years. Cumulative deficit is $5.20 trillion.
House: Deficits fall below $100 billion by 2016 and reach a small surplus in 2023. As a share of GDP, they average 0.6 percent over 10 years. Cumulative deficit is $1.23 trillion.
U.S. DEBT HELD BY PUBLIC IN 2023
Obama: $19.03 trillion; debt-to-GDP ratio declines gradually to 73 percent from about 77 percent at present.
Senate: $18.2 trillion; debt-to-GDP ratio declines gradually to 70.4 percent.
House: $14.2 trillion; debt-to-GDP ratio falls sharply to 54.8 percent.
CLAIMED DEFICIT REDUCTION
Obama: Claims to reduce deficits by $1.8 trillion over 10 years but this includes replacing automatic spending cuts known as the sequester. Obama resurrects previous offer of $930 billion in spending cuts coupled with $580 billion in new tax revenue. Also proposes $166 billion in new spending on surface transportation improvements financed by $167 billion in savings from drawdown of foreign war spending. Proposes moving to a "more accurate" measure of inflation for cost of living adjustments to most programs and tax brackets, for a 10-year savings of $230 billion.
Senate: Claims $1.85 trillion in 10-year savings, but this includes $960 billion to replace automatic spending cuts. Seeks $975 billion in spending cuts and $975 billion in new revenue from eliminating tax credits for the wealthy and large corporations. Proposes $100 billion in new spending on infrastructure, job training.
House: Claims to slash deficits by $4.6 trillion over 10 years, on top of savings from the automatic sequester spending cuts which are left in place. No new revenues are sought, all reductions come from spending cuts, largely cuts to social safety net programs.
HEALTHCARE
Obama: Seeks $400 billion in health care savings over 10 years, largely by standardizing reimbursement rates across the Medicare and Medicaid health care programs and other program changes to improve efficiencies and cut waste. Proposes to increase Medicare premiums after 2017 for wealthier seniors for doctor's visits and drug benefits, generating $50 billion in 10-year savings.
Senate: Makes no major structural changes to Medicare, Medicaid and other health care programs. Seeks $265 billion in savings from Medicare through unspecified new efficiencies to be determined in future legislation; $10 billion in savings from Medicaid through reductions in some reimbursement rates to match those in Medicare and other efficiencies.
House: Seeks repeal of President Barack Obama's health care reforms, clawing back $1.84 trillion in future spending. Cuts $756 billion from Medicaid and other health care programs for the poor by turning them into block grants for states. Seeks $129 billion in efficiency savings from Medicare, but starting in 2024 turns program into a voucher-like subsidy to help seniors buy health coverage from private insurers or the traditional Medicare system. The Republican plan also would apply greater means-testing across the program.
TAXES
Obama: Revives past proposals for raising $580 billion over 10 years from the wealthy, including the "Buffet tax" that phases in a new minimum 30-percent tax rate on income above $1 million and caps on itemized deductions for income starting at $250,000. It also proposes a new $77 billion cigarette-tax increase to fund an early childhood education program and would limit tax-deferred individual retirement accounts to $3 million, exposing more income to taxation.
Senate: Seeks $975 billion in new revenue from closing tax loopholes. It does not specify which of these tax breaks should end but states that any such effort, including broader tax reform, should target breaks that benefit the wealthy and the largest corporations, preserving those aiding the middle class.
House: Seeks no new tax revenue, but leaves in place the $620 billion "fiscal cliff" tax hike on the wealthy. Proposes to eliminate wasteful tax deductions, credits and loopholes in order to lower personal and corporate income tax rates dramatically, with just two tax brackets for individuals - 10 and 25 percent.
DISCRETIONARY SPENDING
Obama: Obama budget seeks to add discretionary spending above caps set in budget legislation in 2011 - with an increase of $99 billion to $1.155 trillion for 2014. It would then gradually reduce the caps in later years.
Senate: Senate plan seeks to stick largely to the pre-sequester spending caps in early years, including $1.058 trillion in 2014 and $1.073 trillion in 2015, but in later years discretionary spending excluding disasters would fall slightly below the 2011 caps.
House: Keeps the post-sequester caps on discretionary spending in place, resulting in sharp reductions for programs ranging from education to the military to national parks - to $966 billion for 2014 and $995 billion for 2015.
(Reporting by David Lawder; Editing by Fred Barbash and Tim Dobbyn)
