Obama’s budget to seek to ‘fully reverse’ automatic cuts, boost spending by $74 billion

WASHINGTON – President Barack Obama called for a surge in government spending Thursday, setting up a certain clash with Republicans who insist that federal spending must be held in check.

The proposal from the president reflects the White House’s newfound confidence in the economy. It comes two months after the president’s fellow Democrats were routed in November elections that gave Republicans control of both houses of Congress.

Presidential budgets are proposals that seldom resemble what Congress eventually passes and Republicans are expected to make major changes to Obama’s plan.

Taking a defiant tone, Obama vowed not to stand on the sidelines as he laid out his opening offer to Congress during remarks in Philadelphia, where Democrats from the House of Representatives were gathered for their annual retreat.

“We need to stand up and go on offensive and not be defensive about what we believe in,” Obama said. Mocking Republicans for their leaders’ newfound interest in poverty and the middle class, he questioned whether they would back it up with substance when it mattered.

Obama’s aides believe that improving conditions give Obama credibility to push his spending priorities unabashedly — despite the fact that Republicans still believe government spends far too much.

Federal deficits, gas prices and unemployment are all falling, while Obama’s poll numbers have crept upward. The president has been newly combative as he argues it’s time to ease the harsh measures that were taken to help pull the economy out of recession.

Obama’s budget, to be formally released Monday, will call for $74 billion more than the levels frozen in place by across-the-board cuts agreed to by both Democrats and Republicans and signed by Obama into law. The White House said his new budget proposals will “fully reverse” the so-called sequestration cuts by increasing spending on both the domestic and military sides by similar amounts.

Under Obama’s proposal, national security programs would see an increase of $38 billion over current spending limits, raising the defence budget to $561 billion. On the domestic side, Obama is calling for $530 billion in spending — an increase of $37 billion.

White House said his budget will be “fully paid for with cuts to inefficient spending programs and closing tax loopholes,” but taxpayers will have to wait until the budget is made public to find out exactly how.

Yet Obama’s move also puts Republicans in a precarious position.

Many Republicans want to spend more on defence, especially in light of threats from terrorism and extremist groups. But Republicans are divided about how to pay. While some have argued for ignoring the spending limits, others want to offset the hikes with cuts to either domestic programs or so-called mandatory programs that cover pensions and health care for the elderly.

By proposing to raise defence spending by about the same amount as domestic programs, Obama is putting the Republicans on notice that he won’t accept cuts to his own priorities just to make way for more spending on national security programs that both parties are in the mood to support.

The Pentagon’s base budget is $496 billion, plus another $64 billion for overseas missions. Obama’s increases would allow for next-generation F-35 fighter jets, for ships and submarines and for long-range Air Force tankers.

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Associated Press writers Jim Kuhnhenn and Andrew Taylor contributed to this report.

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Reach Josh Lederman on Twitter at http://twitter.com/joshledermanAP

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