Obama Targets Retirement Savings in Budget Proposal

April 10, 2013 - 3:18 PM

Obama Budget

President Barack Obama gestures as he speaks about his proposed fiscal 2014 federal budget, Wednesday, April 10, 2013, in the Rose Garden of the White House in Washington. (AP Photo/Charles Dharapak)

(CNSNews.com) – President Barack Obama spoke in the Rose Garden Wednesday about making work pay off for the middle class, even as his $3.77 trillion budget proposal calls for capping the amount of tax deferred retirement savings for high earners.

“Reform should cut and simplify tax breaks that are now inefficient, unfair, or both, so that wealthiest Americans cannot avoid their responsibilities by gaming the system, that middle class working Americans receive their fair share, and that Americans can spend less time and money each year filing taxes,” the budget said.

“That means eliminating tax subsidies for millionaires that they do not need; there is no reason that those making over $1 million should get any tax subsidies for housing, health care, retirement, and child care,” the budget added.

The budget document released Wednesday spends more than either the $3.71 trillion Democratic Senate budget plan or the $3.53 trillion House Republican plan. The Obama proposal also includes a $580 billion tax increase and a change to indexing the growth of entitlement programs.

“To make sure hard work is rewarded, we’ll build new ladders of opportunity for the middle class for anybody who is willing to work hard to climb it,” Obama said, speaking of another aspect of the tax and spending plan. “So we’ll partner with 20 of our communities hit hardest by recession to help them improve housing and education and business investments, and we should make the minimum wage so that no one who works full time should raise their family in poverty.”

Gene Sperling, director of the White House National Economic Council, said there is no reason to give wealthy people tax incentives.

“There isn’t a lot of justification if any for why you would be giving those tax incentives for someone who was able to account for over $3 million in an IRA where most people are putting in a few thousand a year,” Sperling told reporters.

“So what the budget does is it says that once you have an amount sufficient to finance an annuity of $205,000 a year, then anything above that you should not get the deferral of taxes on. You should not get tax exempt treatment on. Right now, in 2013, that amount comes to $3 million,” he added.

“When you think of things we ought to do at a time we’re asking for some tough choices, across the board, this should be in the heavily no-brainer category. Anything above $3 million does not require tax deferral or a tax exempt contribution,” Sperling said.

Going after tax loopholes was a major part of Obama’s Rose Garden remarks.

“If we’re serious about deficit reduction, then these reforms have to go hand in hand with reforming our tax code to make it more simple and more fair so that the wealthiest individuals and biggest corporations do not keep taking advantage of loopholes and deductions that most Americans don’t get,” Obama said.

“If anybody thinks I’ll finish the job of deficit reduction on the backs of middle class families, through spending cuts alone, that actually hurt our economy short term, should think again,” the president added.

For the last four years, the Senate has blocked the passage of a budget, keeping the government running on continuing resolutions. Last year Obama’s budget proposal was unanimously defeated in both the House and Senate.