Obama unveils budget, heralding fiscal showdown

US President Barack Obama Wednesday debuts a budget that will be declared dead on arrival by Republicans, irk liberals and stand as his final offer in the next fiscal clash to consume Washington. Obama's spending plan for 2014 is in many ways an academic exercise, given that it has no chance of being fully enacted in stalemated Washington, as Republicans and Democrats on Capitol Hill have already passed rival budgets. But it will represent Obama's entry in the latest fast-building showdown pitching the president's plan to hike taxes on the most well off against Republican plans to slash government spending with no new revenues. "We don't view this budget as a starting point. This is an offer where the president came more than half way towards the Republicans in an attempt to get a fiscal deal," said a senior White House official. "Are Republicans going to be willing to come to us?" the official asked, ahead of the unveiling of the budget at a time hope has faded for a "grand bargain" deal on the deficit between Obama and Republicans. White House officials have already signaled that Obama's offer will include one key concession to Republicans, which has angered elements of his liberal Democratic base. He will signal he is ready to modify some cherished entitlement social programs, by adjusting cost of living adjustments that could trim benefits for some senior citizens. The White House is billing the budget as a document which proves that the need to cut voluminous deficits does not need to be achieved by savage cuts in government spending and social programs envisaged by Republicans. Officials say the plan includes $1.8 trillion of deficit reduction over 10 years and would raise $580 billion dollars in new revenue by curbing income tax breaks for the rich, without raising rates. Republicans however dispute the deficit reduction figures, arguing that since the budget would dispense with $1.2 trillion in automatic spending cuts, known as the sequester which began in March, its real deficit reduction figure would only be $600 billion in savings. "We hear it contains tax hike upon tax hike upon tax hike -- and, in fact, all of the deficit reduction ... would be derived from myriad tax increases rather than spending reductions," said Senate Republican minority leader Mitch McConnell Tuesday. "It sounds like the White House just tossed last year's budget in the microwave." Among measures that have already been opposed by Republicans, the Obama budget would implement the "Buffett Rule" which would mandate that households on more than $1 million dollars a year pay at least 30 percent of income in taxes. The $3.77 trillion budget blueprint, to be officially unveiled by Obama at 1515 GMT, in the White House Rose Garden, will forsee a deficit of $744 billion, or 4.4 percent of GDP in 2014. Officials projected that the shortfall would reach 2.8 percent of GDP by 2016 and 1.7 percent by 2023. The White House says that the plan represents more than two dollars in spending cuts for every one dollar of new revenue accrued from closing tax loopholes. It also includes $400 billion in health savings that administration officials say could be found through cracking down on fraud.