Treasury chief calls Obama budget balanced approach

WASHINGTON - President Barack Obama's 2014 budget provides a path to a bipartisan agreement and the right course of action for the economy, US Treasury Secretary Jacob Lew said Thursday.

"The President's budget is based on a belief that an agreement to achieve balanced deficit reduction is consistent with making - and fully paying for - targeted investments critical to continued economic growth and job creation," Lew said in prepared remarks for delivery to the House Ways and Means Committee.

"The budget includes the president's compromise offer to Speaker (John) Boehner to reduce the deficit by an additional 1.8 trillion dollars, in addition to the more than 2.5 trillion dollars already enacted, and fully pays for all new initiatives to ensure that they do not add to our deficit burden," he said.

The budget plan, which was unveiled Wednesday, proposes higher taxes on the wealthy and adjustments to entitlement programs. Lew repeated that entitlement savings and additional revenues, two pillars of a fair balance, could not be separated.

The budget involved 3.78 trillion dollars in spending for 2014 fiscal year starting October 1, and 1.8 trillion dollars deficit reduction over the next 10 years.

It would leave a 744 billion dollars budget imbalance for 2014 fiscal year, about 4.4 percent of the gross domestic product, much lower than the high of nearly 10 percent at the height of the recession. By 2023, the deficit to GDP ratio would be further brought down to 1.7 percent.

Lew argued that cutting spending too deeply or too soon would harm the economic recovery in the near term, undermining the shared fiscal goals and the government's ability to make necessary investments for growth over the long term.

There was no doubt the budget was "a serious proposal at a serious time," he noted. "There is a path to a bipartisan agreement that moves the country forward."