WASHINGTON (AP) - President Barack Obama has proposed a $3.8 trillion budget for fiscal 2014 that aims to slash the deficit by $1.8 trillion over 10 years, raise taxes on the wealthy and trim popular benefit programs including Social Security and Medicare. The numbers do not reflect automatic annual spending cuts of 5 percent for domestic agencies and 8 percent for defense. In his 2014 budget, Obama proposes doing away with those cuts.
The agency-by-agency breakdown:
Total Spending: $145.8 billion
Percentage Change from 2013: 5.9 percent decrease
Discretionary Spending: $21.5 billion
Mandatory Spending: $124.4 billion
Highlights: Similar to years past, Obama's budget proposes savings by cutting farm subsidies. The proposal envisions a $37.8 billion reduction in the deficit by eliminating some subsidies that are paid directly to farmers, reducing government help for crop insurance and streamlining agricultural land conservation programs.
The Obama administration says many of these subsidies can no longer be justified with the value of both crop and livestock production at all-time highs. Farm income is expected to increase 13.6 percent to $128.2 billion in 2013, the highest inflation-adjusted amount in 40 years.
Obama and his Republican predecessor, President George W. Bush, have proposed similar cuts every year and Congress has largely ignored them. There is congressional momentum for eliminating some subsidies paid directly to farmers this year, though, as farm-state lawmakers search for ways to cut agricultural spending and pass a five-year farm bill. There is less appetite among lawmakers to cut crop insurance.
The budget also would overhaul the way American food aid is sent abroad, a move largely anticipated by farm and food aid groups. The United States now donates much of its food aid by shipping food overseas, a process many groups say is inefficient. The budget would transfer the money used to ship the food to cash accounts at the United States Agency for International Development. The administration says that would help two million more people annually and save an estimated $500 million over 10 years. Farm and shipping groups are strongly opposed to the idea.
The bulk of the USDA budget is dollars for the Supplemental Nutrition Assistance Program, or food stamps, which are expected to cost around $80 billion in the 2014 budget year. Costs for the program have more than doubled during Obama's presidency, driven by an ailing economy and an expansion of the benefit in 2009. Conservatives have called for cutting or overhauling food stamps, but the budget says the Obama administration strongly supports the current program "at a time of continued need."
Agency: Health and Human Services
Total Spending: $949.9 billion
Percentage Change from 2013: 5.4 percent
Discretionary Spending: $78.3 billion
Mandatory Spending: $871.6 billion
Highlights: The rollout of Obama's health care law next year drives spending increases in the Health and Human Services budget, but the president is also proposing to trim Medicare costs as he tries to draw Republicans into negotiations to reduce government red ink.
Ninety percent of HHS spending is "mandatory," meaning it goes for benefit programs like Medicare and Medicaid that aren't subject to routine annual budgeting in Congress.
Under Obama's health care law, Medicaid spending will rise significantly next year as the program is opened up to low-income people who aren't currently eligible, mainly adults with no children living at home. Middle-class people who don't get coverage on the jobs will be eligible for tax credits to help them buy private health insurance, but those costs aren't reflected in the HHS budget under government accounting practices.
Obama is proposing to cut Medicare spending about $400 billion over 10 years from currently projected levels. In percentage terms, that translates into a single-digit trim for the giant health program that serves seniors and disabled people. The biggest chunk, more than $130 billion, would come from drug company rebates, including a new proposal that speeds up closing Medicare's prescription drug coverage gap.
Upper middle-class and well-to-do seniors would face higher monthly premiums for outpatient care and prescriptions, an idea that Obama has floated before and that also has Republican support. Newly joining beneficiaries would pay somewhat more for home health care and for outpatient services.
The budget generally holds the line on funding for medical research, with about $31 billion for the National Institutes of Health.
The Centers for Disease Control and Prevention gets a boost from a new $40 million program to more quickly track emerging infections and determine if bugs are resistant to antibiotics. And there's a new $130 million initiative to expand mental health treatment and prevention, focusing on young people.
Agency: Homeland Security
Total Spending: $45.2 billion
Percentage Change from 2013: 34.8 percent decrease
Discretionary Spending: $44.6 billion
Mandatory Spending: $572 million
Highlights: Obama has proposed broad budget cuts for the Homeland Security Department to be spread over several agencies, including the Secret Service and the Coast Guard.
The proposal includes a reduction of more than $100 million from the Secret Service budget for protection details for presidential candidates and several million dollars for other special security events. Last year the Secret Service was responsible for costly security details for both Obama as he campaigned for a second term and Republican presidential nominee Mitt Romney ahead of the November election. The agency was also responsible for providing security for several other international meetings, including the NATO Summit in Chicago. Obama's budget also proposes tens of millions of dollars in savings from a technology integration program.
The president has also proposed reducing the Coast Guard's budget for maritime activities by several hundred million dollars. Coast Guard commandant Adm. Robert J. Papp has said his agency has been prepared to reduce air and marine patrol hours because of previous budget cuts, including mandatory government-wide spending reductions implemented earlier this year. Additional budget cuts, he has said, would mean less time on the water and could result in both more drugs and migrants being smuggled into the United States by sea.
Obama's budget includes proposed cuts of more than $100 million to the Federal Air Marshal program. The suggested cuts for the program that puts armed agents aboard planes come in the wake of a decision by the Transportation Security Administration to allow small knives and other formerly prohibited items, including miniature replica baseball bats, to be carried on planes. Unions representing flight attendants and some law makers have objected and are asking TSA to reconsider the policy change.
The president has also proposed cuts to DHS's biodefense activities and the agency's analysis and operations, which includes the Office of Intelligence and Analysis and the Office of Operations and Coordination and Planning. The proposed cuts for biodefense come amid continuing debate over the future of the National Bio- and Agro-Defense Facility that is currently set to be built in Kansas.
Total Spending: $47.3 billion
Percentage Change from 2013: -17.7 percent
Discretionary Spending: $51.8 billion
Mandatory Spending: $0
Highlights: Improving security at America's 274 diplomatic posts abroad in the wake of the Sept. 11, 2012, attack on the mission in Benghazi, Libya, is a main aim of Obama's proposed 2014 State Department budget. The proposal calls for spending more than $4 billion on security upgrades and additional protective personnel, as recommended by an expert panel convened after the Benghazi attack that killed the U.S. ambassador to Libya and three other Americans.
Significant reductions in the proposed budget reflect the Obama administration's scaling down of operations in Iraq, Afghanistan and Pakistan. Although contingency programs in those frontline states account for $6.8 billion of the proposed budget, that is $4.2 billion less than requested in 2012. It includes $1.7 billion for civilian programs in Iraq, $3.1 billion for Afghanistan and $1.3 billion for Pakistan.
The budget honors commitments in assistance to U.S. allies in the Mideast: Israel, $3.1 billion in military aid, Egypt, $1.5 billion in military aid and economic support, and $660 million for Jordan. And, it contains a request for $580 million for programs to encourage reform in the Middle East and North Africa in the aftermath of the revolutions that have rocked the Arab world.
It also earmarks $8.3 billion for global health initiatives, including $6 billion for AIDS programs, $1.1 billion for food security and $481 million for efforts to combat climate change. In addition, the budget sets aside $4.1 billion for humanitarian assistance around the world.
Agency: Veterans Affairs
Total Spending: $149.5 billion
Percentage Change from 2013: 10
Discretionary Spending: $63.5 billion
Mandatory Spending: $86 billion
Highlights: The president is proposing to increase spending by nearly $300 million for that part of the VA responsible for handling disability claims, an increase of more than 13 percent. More veterans are seeking compensation for wounds and illness incurred or aggravated while on active duty. The VA is struggling to keep up and the number of claims pending long than 125 days has soared over the past four years.
The VA estimates that it will treat 6.5 million veterans in the coming fiscal year at its medical centers and outpatient clinics. Overall spending for VA health care will increase by about 2.5 percent, but certain services would grow at a much faster pace. For example, an increase of more than 13 percent is sought for mental health care, and an increase of 15 percent is sought for geriatric care.
The budget proposes to pare spending on major constructions projects, but includes money for the completion of a mental health center in Seattle and for the addition of three new national cemeteries: two in Florida and one in Omaha, Neb. The VA's spending on research would flatten under the president's budget.
The president is also repeating his call for establishing a Veterans Job Corps, which would dedicate $1 billion over five years putting veterans to work improving public lands and working in law enforcement and firefighting jobs, but the same proposal went nowhere last year.