WASHINGTON — In his fifth annual budget proposal to Congress on Wednesday, President Obama once again put forward a fiscal mix of investments in infrastructure, education, and research with further deficit reduction through tax increases and spending cuts.
For the first time, he included changes to Medicare and Social Security intended to entice Republicans back to the bargaining table. But the concessions showed little sign of winning them over.
The main new element of the budget is his proposal, offered previously in private negotiations with House Speaker John A. Boehner, for a new cost-of-living formula that could reduce the amount of future increases in Social Security benefits.
On the spending side, Obama wants to spend $66 billion over 10 years to help states make prekindergarten available universally, paid for by higher taxes on tobacco products.
Obama incorporated the compromise offers on Social Security and Medicare into his budget — over vehement objections from many Democrats — in part after earlier private discussions with individual Republican senators about what he could do to assure them of his seriousness about reaching a long-term deal to stabilize the national debt.
Republican leaders in Congress spurned Obama’s intended overture after early media reports on it late last week and again Wednesday, rejecting further tax increases on the wealthy and calling the spending cuts too small.
Obama is hoping that rank-and-file Republican senators can be persuaded to join with him and Senate Democrats in a compromise. He was expected to dine with a dozen Senate Republicans at the White House on Wednesday night.
“The American people deserve better than what we’ve been seeing: A short-sighted, crisis-driven decision making like the reckless across-the-board spending cuts that are already hurting a lot of communities out there, cuts that economists predict will cost us hundreds of thousands of jobs during the course of this year,’’ Obama said in the Rose Garden as his budget was released.
‘‘For years, the debate in this town has raged between reducing our deficits at all costs and making the investments necessary to grow our economy,’’ he added. ‘‘And this budget answers that argument, because we can do both. We can grow our economy, and shrink our deficits.’’
For the 2014 fiscal year, which begins Oct. 1, the federal deficit would be $744 billion, according to administration officials, down from the $973 billion shortfall projected for the current fiscal year, which would end four straight years of trillion-dollar deficits.
A $744 billion deficit next year would be equal to 4.4 percent of the total economy, as measured by the gross domestic product, down from a high of 10.1 percent of GDP at the height of the recession. By decade’s end, the annual deficit would be 1.7 percent of GDP, officials said.
That is a level that most economists consider reasonable in a growing economy, but annual deficits would begin to grow unsustainably thereafter, absent changes in law, as aging baby boomers drive up costs for federal benefit programs.
With unemployment still high, Obama also proposed some new spending for both short-term and long-term economic growth.