WASHINGTON — President Obama will propose a 10-year budget on Monday that stabilizes the federal deficit but does not seek balance, instead focusing on policies to address income inequality as he adds nearly $6 trillion to the debt.
The $4 trillion budget would hit corporations that park profits overseas, raise taxes on the richest of the rich and increase the incomes of the middle class through new spending and tax credits. Mr. Obama will challenge the Republican Congress to answer his emphasis on wage stagnation, according to congressional aides briefed on the details.
The central question Mr. Obama will pose is this: Should Washington worry about what may be the defining economic issue of the era — the rising gap between the rich and everyone else — or should policy makers address a mountain of debt that the White House hopes to control but not reduce?
The president’s budget — thicker than a phone book in multiple volumes — will be just the starting point for that discussion with the newly elected Republican Congress, a document representing Mr. Obama’s aspirations, not the final word. Criticism of the president’s intentions arrived even before the budget was presented.
“We’re six years into the Obama economic policies, and he’s proposing more of the same, more tax increases that kill investment and jobs, and policies which are hardly aspirational,” said Representative Paul D. Ryan of Wisconsin, chairman of the House Ways and Means Committee, in an interview this weekend.
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But even as Mr. Ryan criticized proposals that could be viewed as pitting class against class, he acknowledged a reality many Republicans have long avoided: The rich are getting much richer. Republicans once held that liberal economic policies would stifle “the job creators.” Now, Mr. Ryan says, the creators are doing well. Others are not.
“The Obamanomics that we’re practicing now have exacerbated inequality. They’ve exacerbated stagnation. They’re made things worse,” he said. “The wealthy are doing really well. They’re practicing trickle down economics now.”
Simply acknowledging that is an important step, said Pete Wehner, a former domestic policy adviser to President George W. Bush. Middle-class incomes have stagnated in the face of globalization, technological changes and rising health care and higher education costs.
“Republicans have had almost nothing to say about it,” Mr. Wehner said, encouraging Congress to meet the president’s proposals with their own. “The real issue is social and economic mobility, how people can move up the ladder. Sometimes conservatives deny a problem exists because by acknowledging the premise they fear it will lead them to policies they can’t accept.”
