Obama Expects Fight Over $3.55 Trillion Budget Plan

President Barack Obama said he expects a fight to get his $3.55 trillion budget through Congress because it will challenge longtime Washington interest groups and lobbyists.

The president said today the spending plan he submitted to Congress reflects the promises he made during the campaign to change the government’s priorities and take the nation in a new direction.

“I realize that passing this budget won’t be easy because it represents real and dramatic change,” Obama said in his weekly radio and Internet address that. “It also represents a threat to the status quo in Washington.”

Obama kicked off his budget fight during a week when the Standard & Poor’s 500 Index fell to a 12-year low as the government rescued Citigroup Inc. The Obama administration’s attempts to break the grip of the worst financial crisis in 70 years are unlikely to bring immediate relief as companies from General Motors Corp. to JPMorgan Chase & Co. cut payrolls.

Gross domestic product contracted at a 6.2 percent annual pace from October through December, more than economists anticipated and the most since 1982, according a report yesterday from the Commerce Department. Consumer spending, which comprises about 70 percent of the economy, declined at the fastest pace in almost three decades.

Taxing Wealthy Americans

Obama’s budget for the fiscal year starting Oct. 1 would increase taxes on the wealthiest Americans and some companies to fund tax breaks for lower- and middle-income workers, and investments in new energy technology, education and health-care.

Humana Inc., an insurer, was among the health-care stocks that declined last week on concern Obama will cut Medicare payments to insurers and raise rebates drugmakers must provide to Medicaid recipients.

Obama said today that he realizes his proposals “won’t sit well with the special interests and lobbyists who are invested in the old way of doing business.”

“I know they’re gearing up for a fight as we speak. My message to them is this: So am I,” the president, a Democrat, said. “The system we have now might work for the powerful and well-connected interests that have run Washington for far too long, but I don’t.”

Obama’s budget would impose almost $1 trillion in higher taxes over the next decade on the highest-earning Americans -- families making more than $250,000 a year -- Wall Street financiers, U.S.-based multinational corporations and oil companies while cutting taxes for lower earners.

‘Fair and Balanced’

“During the campaign, I promised a fair and balanced tax code that would cut taxes for 95 percent of working Americans, roll back the tax breaks for those making over $250,000 a year, and end the tax breaks for corporations that ship our jobs overseas,” he said today. “This budget does that.”

He also said he will eliminate unnecessary programs and vowed his administration will go through the federal books “page by page, and line by line” to make cuts.

“This budget also reflects the stark reality of what we’ve inherited - a trillion dollar deficit, a financial crisis, and a costly recession,” Obama said.