WASHINGTON, April 10 (Reuters) - The White House on Wednesday proposed a budget that sharply trims the U.S. deficit over three years by forcing millionaires to pay more in taxes and enacting spending cuts that replace the “sequester” reductions that went into place last month.
President Barack Obama’s fiscal 2014 budget blueprint ensures that those making $1 million a year or more would have to pay at least 30 percent of their income, after gifts to charity, in taxes, officials said.
That increase, along with spending cuts and a 28 percent cap on tax deductions for high earners, would bring the U.S. budget deficit down to 2.8 percent of GDP by 2016, senior administration officials told reporters. The nonpartisan Congressional Budget Office in February projected the U.S. deficit to be 5.3 pct of GDP this year.
The president’s budget stands little chance of being enacted into law. However, senior administration officials said that, in spite of Republican leaders’ resistance to tax increases, they hoped it could lead to a deficit reduction accord.
“There continue to be people who are on the Republican side ... in the Senate at least, who are saying things that would give you some hope that there is a path to a deal,” a senior administration official told reporters.