A closer look at Obama's Tax and Spending Plan

The White House offered a tax and spending plan Tuesday that was largely absent of lofty new policy goals, acknowledging the limited ambition of both political parties to renew a fight over the budget with midterm elections looming. 

President Barack Obama's $3.9 trillion budget for the year beginning Oct. 1 focused on targeted measures, many of which have been previously proposed, including tax increases on upper-income Americans and companies such as oil and gas concerns. It also called for spending increases for education, infrastructure projects, and research and development, and included proposals to aid low-income workers and the unemployed, such as expanding the Earned Income Tax Credit for more childless workers.

Administration officials contend these measures would help employment and economic growth, but they stopped well short of Mr. Obama's first-term ambitions, such as overhauling health-care laws. 

The plan received a chilly reception from Republicans on Capitol Hill who want to avoid big political compromises now in case they win control of the Senate in November.

A glimmer of commonality did emerge between the White House and congressional Republicans, suggesting potential areas for future compromise. A number of Republicans have begun focusing on ways to strengthen the EITC and other anti-poverty programs. And Rep. David Camp (R., Mich.) last week proposed a tax revamp to pay for certain transportation projects that was similar to the model used in the Obama budget.

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Acknowledging the potential for future joint efforts, Sylvia Mathews Burwell, the director of the White House Office of Management and Budget, said the administration hopes "this budget influences the choices that are going to be made" by Congress in the months ahead. 

The budget more clearly signaled that a big deal on entitlement spending and the country's long-term budget woes is unlikely anytime soon. Indeed, the White House stripped one potential olive branch to the GOP, a proposal from last year's budget that would have cut future spending on Social Security by limiting the growth of cost-of-living increases. 

The pivot was praised by liberals, but bemoaned by some Republicans who said the White House was shifting away from reducing deficits. "After years of fiscal and economic mismanagement, the president has offered perhaps his most irresponsible budget yet," House Speaker John Boehner (R., Ohio) said. "American families looking for jobs and opportunity will find only more government in this plan."

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