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WASHINGTON — President Obama yesterday turned in a $3.8 trillion budget for next year that would erase the dreaded “sequestration” federal spending cuts but still manage to hit just about every American in the wallet.
Obama’s budget would raise roughly $1.1 trillion in new taxes and fees that would hit smokers, the wealthy, financial institutions and airlines — as well as gradually take more income-tax revenue from all Americans.
The federal tax on cigarettes would nearly double to $1.95 per pack to pay for a new preschool program for 4-year-olds. The “Buffett Rule” would impose a minimum 30 percent tax on income over $1 million.
Despite new taxes, the budget, which Obama delivered more than two months late, would not balance the federal books.
While reducing annual deficits from recent record levels, it would leave the nation another $5.3 trillion further in debt over 10 years.
“The numbers work,” Obama insisted in a Rose Garden speech. “There’s not a lot of smoke and mirrors in here.”
He nevertheless included some tried and true gimmicks, such as counting nearly $2 trillion in savings over the next decade from ending the wars in Iraq and Afghanistan.
New spending would include $50 billion for infrastructure projects and $1 billion to create a network of manufacturing- innovation institutes.
Senate Republican Leader Mitch McConnell of Kentucky slammed it as “just another left-wing wish list.”
Obama, who last night hosted a dinner for GOP senators, also extended a budget olive branch.
He proposed cutting entitlement spending by $230 billion over a decade by changing the way the government calculates annual cost-of-living adjustments for federal benefits, including Social Security.
$3.8T budget proposal a mix of tax hikes, entitlement cuts and new spending
* $230B entitlement cut, including Social Security and Medicare, over 10 years
* $53.4B in new revenue from “Buffett Rule” millionaires tax
* $79B from raising inheritance taxes
* $250B in new spending for jobs programs, infrastructure projects and expanded pre-school