Obama Budget Rejected By Republicans, Speaker Indicates Counter-Proposal

U.S. President Barack Obama has been accused of "shamelessly pandering" to Democrats before the 2016 election. Republicans rejected Obama’s proposal to post a $474 billion deficit and bypass mandatory spending caps.

The Republican Speaker of the House of Representatives, John Boehner, said that Obama's proposal was to indulge in "more taxes, more spending, and more of the Washington gridlock" which had failed middle-class families. He indicated that there would be a counter-proposal as he said that Republicans would propose a budget "about the future" while Obama was about the past.

Obama said that it was the right time to invest $478 billion on improving infrastructure. "We can afford to make these investments while remaining fiscally responsible," Daily Mail quotes the U.S. president, "In fact, we cannot afford -- we would be making a critical error -- if we avoided making these investments." Here are the key points of Obama's budget proposal.

Tax Return Failure

It is punishable under the U.S. law not to file a tax return purposely. Obama proposes to declare it a felony if someone fails to do so in three out of five years. The punishment is up to one year in prison at present. Obama wants it to be up to five years.

Middle Class

Obama wants to cut taxes for middle class families. He wants to focus on $US2 trillion in 10-year tax increases. The tax increase will be applicable mostly to corporations and the rich. News.com.au reports that he also wants to target cigarette smokers.

Climate Change

According to Obama, taxpayers are spending extra money for extreme climate changes. Taxpayers have apparently paid $US300 billion over the past decade. More than half the amount was for hurricanes and other disasters. Obama’s budget attributes to rising sea levels and extreme weather including flood insurance, battling wildfires and crop insurance.

Federal Deficits

The deficit for 2016, as proposed by Obama, is $US474 billion. This is the lowest deficit since 2008. The deficit is small when compared to the overall size of the economy. According to many economists, the deficit is manageable.

According to Republicans, Obama is moving the wrong way as the shortfalls are way too big. The $US474 billion deficit is the biggest deficit in history with the exception of the Great Recession of 2008.

Contact the writer: s.mukhopadhyay@IBTimes.com.au