Obama sends Congress $3.8 trillion spending plan

WASHINGTON (AP) - President Barack Obama sent Congress a $3.8 trillion spending blueprint on Wednesday that strives to tame runaway deficits, raising taxes on the wealthy and trimming popular benefit programs. In aiming for a compromise between Republicans who refuse to raise taxes and Democrats who are seeking to protect the benefit programs, he managed to make some on both sides unhappy.Battles between the two parties over budgeting priorities have brought the government to the brink of shutdown several times and the latest plan seeks to provide a longer term solution to keep the administration from moving from crisis to crisis.It is unlikely that Congress will get down to serious budget negotiations until this summer, when the government once again will be confronted with the need to raise the governments borrowing limit or face the prospect of a first-ever default on U.S. debt.Obama will have a private dinner at the White House with about a dozen Republican senators Wednesday night as part of efforts to win over the opposition. The budget is expected to be a primary topic, along with proposed legislation dealing with gun control and immigration.The presidents budget proposal includes $1.8 trillion in new deficit cuts as the U.S. tries to wrestle down its enormous debt. The last time the government ran an annual surplus was in 2001, the year of the 9/11 attacks that led to the wars in Afghanistan and Iraq.On Wednesday, the Treasury Department said the U.S. deficit was on pace to finish below $1 trillion for the first time in five years. The deficit hit a record $1.41 trillion in budget year 2009Obamas 2014 budget blueprint assumes that Washington reverses the recent deep budget cuts that have become a daily reality for the military. It calls for a base defense Department budget of $526.6 billion $52 billion more than the level established by the blunt spending cuts, which had been designed to force the White House and Congress to reach a fiscal deal to avoid them.The budget plan includes an $88.5 billion placeholder for additional war costs in Afghanistan as Obama decides on the pace of the drawdown of U.S. combat troops next year.The presidents spending and tax plan for the budget year that begins Oct. 1 is two months late. The administration blames the delay on the lengthy negotiations at the end of December to avert the so-called fiscal cliff of tax increases and spending cuts and fights over the cuts that eventually took effect March 1.The presidents budget projects deficit reductions of $1.8 trillion over the next decade, achieved with higher taxes, reductions in payments to Medicare health aid providers and cutbacks in the cost-of-living adjustments paid to millions of recipients in Social Security pensions and other government programs.Early indications are that the budget negotiations will be intense. By including proposals to trim Social Security and Medicare, the governments two biggest benefit programs, Obama is hoping to entice Republicans to consider tax increases.But Republicans have been adamant in their rejection of higher taxes, arguing that the $600 billion increase on wealthy earners that was part of the late December agreement is all they will tolerate.House of Representatives Budget Committee Chairman Paul Ryan, last years Republican vice presidential nominee, rejected the administrations argument that the refusal of Republicans to consider further tax increases represented inflexibility.