WASHINGTON (AP) — President Barack Obama sent Congress a $3.8 trillion spending blueprint on Wednesday that strives to achieve a "grand bargain" to tame runaway deficits, raising taxes on the wealthy and trimming popular benefit programs including Social Security and Medicare.
The president's budget projects deficit reductions of $1.8 trillion over the next decade, achieved with higher taxes, reductions in payments to Medicare providers and cutbacks in the cost-of-living adjustments paid to millions of recipients in Social Security and other government programs.
The budget would also nearly double the federal tax on cigarettes to $1.95 per pack. That money would fund a new pre-school program for 4-year-olds.
The president's proposed spending for the 2014 fiscal year, which begins Oct. 1, would rise 2.5 percent from this year.
The budget projects a deficit for the current year of $973 billion, falling to $744 billion in 2014. Those would be the first deficits below $1 trillion since 2008. Even with the president's deficit reductions, the budget projects the red ink would total $5.3 trillion over the next 10 years.
The plan includes a compromise proposal that Obama offered to House Speaker John Boehner during "fiscal cliff" negotiations last December. Boehner walked away from those talks because of his objections to raising taxes on the wealthy.
By including proposals to trim Social Security and Medicare, the government's two biggest benefit programs, Obama is hoping to entice Republicans to consider tax increases.
"I have already met Republicans more than halfway, so in the coming days and weeks I hope that Republicans will come forward and demonstrate that they're really as serious about the deficit and debt as they claim to be," Obama said in the White House Rose Garden.
But instead of moving Congress nearer a grand bargain, Obama's proposals so far have managed to anger both the Republicans, who are upset by higher taxes, and Democrats unhappy about cuts to Social Security benefits.