WASHINGTON President Barack Obama's budget proposal released on Monday stands little chance of becoming law but it lays out a stark contrast with the tax and spending proposals of Republican presidential candidates.
Following is a summary of Obama's budget plan, as well as ideas put forward by the four Republicans remaining in the race for their party's nomination to face Obama in the November 6 election:
PRESIDENT BARACK OBAMA
Obama would raise taxes on the wealthy and boost spending to create jobs. His budget would add well over $6 trillion to the national debt over 10 years.
Households making more than $1 million a year would face a minimum tax rate of 30 percent, and the 2001 and 2003 tax cuts would expire for the highest earners. The administration intends to outline a plan to lower corporate tax rates later this month.
Obama would spend $300 billion in one year on job-creation measures like road construction, teacher salaries and tax breaks to spur hiring.
He would cut military spending by $487 billion over 10 years, and cut $360 billion from the Medicare and Medicaid health programs for the elderly and the poor. He would cut another $278 billion from programs including farm subsidies and federal employee pensions.
FORMER MASSACHUSETTS GOVERNOR MITT ROMNEY
Romney says he would balance the budget if elected president. Because he would also reduce tax revenue and protect military spending, that would require sharp cuts to domestic spending and benefit programs.
Romney's tax plan would cut annual tax revenue by $180 billion compared with current levels, according to the nonpartisan Tax Policy Center. He would keep the 2001 and 2003 income tax cuts in place but allow breaks for education, child care and low-income workers to expire.
He would repeal the estate tax and eliminate investment taxes for middle- and low-income taxpayers. He would reduce the corporate income tax from 35 percent to 25 percent.
Overall his plan would raise taxes for the poor and lower taxes for the rich, according to the Tax Policy Center.
Romney would have to cut spending by 21 percent if he were to balance the budget by the end of his first term in 2016, according to the Center for Budget and Policy Priorities, a liberal think tank. That would require sharp cuts to veterans benefits, food stamps, environmental protection and other programs.
Romney would gradually raise the retirement age for Social Security pensions and slow the growth of benefits for more affluent retirees. Retirees would get a subsidy to buy private healthcare coverage or they could stick with the existing Medicare plan.
Romney would not cut the military budget and would expand the size of the Navy.
FORMER HOUSE OF REPRESENTATIVES SPEAKER NEWT GINGRICH
Like Romney, Gingrich has also promised to balance the budget. Because he has called for deeper tax cuts than Romney, that would require deeper spending cuts as well.
Gingrich would cut government revenues by at least $850 billion per year from current levels, according to the Tax Policy Center.
He would give taxpayers a choice between a flat 15 percent tax rate or the current scheme. Current tax breaks, such as those for mortgages and employer-provided health benefits, would stay in place.
He would eliminate the estate tax and the capital gains tax and would reduce the corporate tax rate from 35 percent to 12.5 percent.
The richest Americans would get a 13 percent tax cut while the poorest would see a break of less than 1 percent, according to the Tax Policy Center.
Gingrich would give people the option of setting up private retirement accounts rather than Social Security.
Like Romney, he would give retirees the option of using government subsidies to buy health coverage or sticking with the traditional Medicare plan.
He would hand control of unemployment programs and benefits for the poor over to the states, which he says would save trillions of dollars over a 10-year period.
FORMER SENATOR RICK SANTORUM
Santorum also would dramatically cut taxes and spending.
He would cut spending by $5 trillion over five years and reduce tax revenue by about $900 million annually.
Santorum would cut the top personal income tax rate from 35 percent to 28 percent but keep in place tax breaks for mortgages and healthcare. He would boost tax breaks for parents.
He would cut the corporate tax rate in half to 17.5 percent and exempt manufacturers from paying it entirely.
On the spending side of the ledger, Santorum has been more specific than his Republican rivals about what would be cut.
Environmental protection, birth control, foreign aid, and federal workers' pay and benefits would be especially targeted.
Defense spending would be frozen for five years, but the automatic cuts now scheduled to take effect would be averted.
He would freeze health care, food stamps and housing assistance for the poor for five years and hand control of these programs to the states.
Retirees would get a government subsidy to buy health insurance on the private market, which evidently would replace the government's Medicare program.
Santorum would raise the retirement age and slow the growth of Social Security benefits by changing the way they are tied to inflation.
TEXAS CONGRESSMAN RON PAUL
Paul's tax and spending proposals underpin his vision of a dramatically curtailed federal government.
He has called for an immediate, $1 trillion spending cut, which would slash the federal budget by more than one third.
He would eliminate the departments of Education, Energy, Commerce, Interior and Housing and Urban Development, and he has also called for shutting down the Federal Reserve and the Internal Revenue Service.
He would seek to repeal the 16th amendment to the U.S. Constitution, which allows the federal government to levy an income tax.
He would reduce the corporate income tax to 15 percent.
Alone among Republicans, he would reduce military spending by pulling back from overseas commitments.
He has said that he would protect Medicare and Social Security for current recipients but move toward free market approaches for those who have not yet retired.
Trending On Reuters
Nineteen people were killed and 25 wounded after an attack by a knife-wielding man at a facility for the disabled in central Japan early on Tuesday, a government official said, in Japan's worst mass killing in decades. Full Article
- Turkey detains 42 journalists in crackdown as Europe sounds alarm
- Sanders backers revolt on raucous opening day at U.S. Democratic convention
- U.N. body overturns rejection, accredits press freedom watchdog
- Nine militants killed in police raid in Bangladesh
- After Nepal prime minister goes, China says hopes for stability