The fulcrum of Obama’s budget is a $1.8 trillion offer for additional deficit reduction over the next 10 years, beyond some $2.5 trillion in steps Obama and Congress have already taken in the past two years to reduce future deficits (adding up to $4.3 trillion total). Obama first made the offer a few months ago in fiscal talks with House Speaker John Boehner (R) of Ohio, and now it’s an official part of his budget – a move intended to lure Republicans to the bargaining table.
"By including this compromise proposal in the Budget, the President is demonstrating his willingness to make tough choices to find common ground to further reduce the deficit,” the Obama administration says in its budget summary, released Wednesday.
The $1.8 trillion in deficit cuts would replace the “sequester,” cancelling those automatic budget cuts that are now affecting agencies ranging from the Defense Department to the Federal Aviation Administration. Instead, the budget savings would come largely from tax hikes and entitlement reforms, and a related easing of interest payments on national debt.
The Obama administration says its plan would bring the federal deficit down to 2.8 percent of gross domestic product in 2016 and 1.7 percent of GDP in 2023.