Obama's dilemma: boosting domestic initiatives without adding to deficit

A worker walks while repairing the road at Times Square in New YorkBy Mark Felsenthal and David Lawder WASHINGTON (Reuters) – President Barack Obama will unveil a budget this week that seeks to boost spending on new initiatives such as road repairs, education programs and tax breaks for the working poor while avoiding an increase in U.S. deficits. Obama has made reducing the gap between the rich and the poor a centerpiece of his agenda for his next three years in office. But he is limited in his ability to offer bold new initiatives because of a budget accord he reached in 2011 with House of Representatives Republicans that puts strict curbs on both domestic and military spending. An agreement reached in December between congressional Republicans and Obama’s Democrats allowed a slight easing of curbs on spending in the current 2014 fiscal year, but outlays will be essentially flat in fiscal 2015, which begins October 1.

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