Barack Obama
Obama's 2016 budget includes plans to stamp out culture of stashing profits abroad Reuters

Barack Obama is set to clash with a Republican Congress as he sends in a $4trn spending plan wish-list.

At the heart of the proposed budget is increased domestic and military spending to be paid for in part by higher taxes on the wealthy.

"I want to work with Congress to replace mindless austerity with smart investments that strengthen America," Obama said in a speech at the Department of Homeland Security. "I'm not going to accept a budget that locks in sequestration going forward. It would be bad for our security, and bad for our growth."

Republicans were quick to criticise the tax increases which total $2trn, according to an AP report. "The president is advocating more spending, more taxes and more debt," said House of Representatives Speaker John Boehner.

"A proposal that never balances is not a serious plan for America's fiscal future."

The Obama administration said its budget represented a strategy to strengthen the middle class and help "hard-working families get ahead in a time of relentless economic and technological change.

"This country's better off than it was four years ago, but what we also know is that wages and incomes for middle class families are just now ticking up," Obama said in an interview on NBC.

"They haven't been keeping pace over the last 30 years compared to, you know, corporate profits and what's happening to folks in the very top."

The new budget offers an array of spending programs and tax increases on the wealthy that Republican lawmakers have already rejected.

Obama's fiscal blueprint, for the budget year that begins on 1 October, would leave a deficit of $474bn. However, the budget plan never reaches balance over the next decade and the deficit would rise to $687bn in 2025.

The administration contends that various spending cuts and tax increases would trim the deficits by about $1.8trn over the next decade, leaving the deficit at manageable levels.

The budget includes defence spending of $561bn and also a $60bn programme for free community college for an estimated 9 million students if all states participate. It also proposes expanding child care to more than 1.1 million additional children under the age of 4 by 2025.