Obama proposes $5.4 trillion budget with focus on middle class

File photo of US President Barack Obama speaks during a press conference in the briefing room of the White House December 19, 2014 in Washington, DC.

WASHINGTON - President Barack Obama proposed a $3.99 trillion (S$5.4 trillion) budget for fiscal year 2016 on Monday that sets up a fight with Republicans by proposing programs to boost the middle class and pay for them through higher taxes on corporations and wealthy Americans.

The budget foresees a $474 billion deficit, which is 2.5 per cent of US Gross Domestic Product. It projects deficits stabilizing at that rate over a 10-year period, senior administration officials told reporters.

The budget achieves some $1.8 trillion in deficit reduction, officials said, through healthcare, tax and immigration reform, but the forecast assumes Republican support for Obama's programs, which is unlikely.

Republicans have blocked immigration reform legislation in the House of Representatives, for example, and the budget assumes passage of such a bill.

Obama's budget fleshes out proposals to help middle class Americans from his State of the Union address and helps highlight Democratic priorities for the last two years of his presidency and beginning of the 2016 presidential campaign.

The budget is as much a political document as a fiscal roadmap and would require approval from the Republican-controlled Congress to go into effect.

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