Obama has couched his approach as "middle-class economics" aimed at reversing the long-term stagnation in incomes for average families. It proposes that Washington spend more on education, infrastructure and job training. He argues that spending will fuel economic growth.
It provides new tax breaks for those with modest incomes—and raises taxes on Wall Street and high-income Americans to pay for them. It proposes to hold the budget deficit, which has declined lately, at a stable level relative to the size of the economy. But it does not eliminate the deficit.
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Republicans propose to cut precisely the kinds of domestic spending Obama wants more of. They argue that higher spending levels and taxes would retard future growth.
They would repeal "Obamacare" outlays for health insurance subsidies and sharply cut spending on the Medicaid program that provides health insurance for the poor. They would eliminate the deficit over 10 years, though they use some budgetary sleight of hand to do it—assuming the government would find some other sources for the Obamacare tax revenues they'd repeal, and that their unspecified tax reforms would ramp up growth.
The competing approaches reflect the electoral coalitions and well as the underlying philosophies of each party. Democrats rely heavily on younger, low-income and nonwhite voters who disproportionately benefit from their tax and spending plans.