(Reuters) - President Barack Obama will send Congress his fiscal 2015 budget request on Tuesday, and lawmakers will promptly ignore it.
But the annual ritual will highlight his policy priorities for the coming year and serve as a Democratic Party manifesto as Democrats seek to draw a contrast with Republicans ahead of congressional elections in November.
The budget plan will cover less than a third of the approximately $3.5 trillion the government is likely to spend next year.
The rest will be doled out automatically through federal benefits programs that mostly care for the elderly and poor, including Social Security, Medicare and Medicaid.
Obama will outline how he would parcel out $1.014 trillion on government agencies’ discretionary programs ranging from the military to national parks.
The level, barely above this year’s cap of $1.012 trillion, was set by a recent budget deal and forces him to make some difficult cuts to fund the programs he wants.
If the president wants to spend more, he’ll have to sell Congress on the idea of raising additional revenues.
The following are some of president’s spending and tax proposals:
The president wants to shrink the U.S. Army to its lowest level since before World War Two, eliminate the popular A-10 aircraft and reduce military benefits. The Pentagon’s budget for the 2015 fiscal year beginning in October is an estimated $496 billion, about the same amount as the current fiscal year.
Obama wants a four-year, $302 billion plan to repair deteriorating roads and bridges and fund transit projects. He said he would raise $150 billion in new money by ending some tax breaks for businesses as part of a corporate tax reform that would also lower tax rates.
Democrats and Republicans agree on the need to spruce up the nation’s surface transportation system, but disagree on how to fund the work.
The president wants to “fully realize” his plan to build 45 manufacturing innovation centers. These are hubs that take advantage of universities and businesses located close to one another to share technology and ideas before products reach the commercial phase.
The president has announced three such centers this year. In his 2014 budget request, he asked Congress for $1 billion to launch up to 15 of them.
Obama plans an energy efficiency initiative aimed at supporting state efforts to modernize the power grid. In his budget proposal last year, the president asked for $200 million to fund a competitive grant program for this.
The president called in his State of the Union speech for more to promote apprenticeships, which are widespread in European countries but less common in the United States, and for connecting companies with community colleges to design training programs targeted at companies’ needs.
The president proposed two years ago as part of his 2013 budget an $8 billion Community College to Career Fund.
Obama will renew his call for universal pre-kindergarten and expanding the Head Start program, which provides early childhood education for low-income families.
In his 2014 budget proposal, the president asked for $75 billion over ten years and $1.3 billion in the first year to expand pre-school to all American children. It was to have been paid for by raising the cigarette tax to $1.95 per pack from $1.01.
Obama will ask to allow the Departments of the Interior and Agriculture U.S. Forest Service to draw on Federal Emergency Management Agency disaster funding to pay for responses to the largest wildfires.
The president said he will ask for a $1 billion climate resiliency fund.
The fund would help communities deal with extreme weather events such as floods, drought, heatwaves and wildfires.
Obama called in his State of the Union speech for expanding the Earned Income Tax Credit for childless workers. The program has bipartisan support because it rewards low-income people who work.
The EITC is one of the most popular anti-poverty programs in the United States, but is far more beneficial for workers with children than those without.
The maximum credit available for a worker with one child is over $3,300 but is less than $500 for a worker without a child.
The cost of the expansion has been estimated at $12.1 billion.
Obama is proposing a 1 percent pay increase for federal workers, the Washington Post reported.
On the revenue side, the administration wants to seek new limits on overseas tax avoidance by corporations by seeking to prevent them from playing one country’s tax rules for certain securities against another‘s.
At the moment, big corporations must pay the top 35 percent corporate tax rate on foreign profits, but not until those profits are brought into the country from offshore. Many lawmakers argue this tax structure encourages companies to make job-creating investments in foreign countries rather than in the United States.
Additionally, under the new budget, some U.S. technology companies would face new limits on their ability to shift profits abroad by housing valuable software overseas.
Obama has said he would support lowering corporate tax rates alongside eliminating many tax breaks companies enjoy. But he would use the savings from closing tax loopholes to fund spending, for example highway construction, which Republicans have opposed.
Reporting By Mark Felsenthal and David Lawder; Editing by Sophie Hares