Obama Sends Budget to Congress
February 15, 2011
President Barack Obama sent Congress a $3.73 trillion budget Monday that holds out the prospect of eventually bringing deficits under control through spending cuts and tax increases. But the fiscal blueprint largely ignores his own deficit commission's plea to slash huge entitlement programs like Social Security and Medicare, reports the Associated Press (AP).
- Overall, Obama proposed trimming the deficits by $1.1 trillion over a decade although his changes would actually add to the deficits this year and next.
- Obama is projecting the deficit will hit an all-time high of $1.65 trillion this year and then drop sharply to $1.1 trillion in 2012, with an expected improvement in the economy and as reductions in Social Security withholding and business taxes expire.
Obama's 2012 budget would actually add $8 billion to the projected deficit for that year because the bulk of the savings he will achieve through a freeze in many domestic programs would be devoted to increased spending in areas the administration considers priorities, such as education, clean energy and high-speed rail, says the AP.
- Of the $1.1 trillion in deficit savings that Obama is projecting over the next 10 years, two-thirds would come from spending cuts including $400 billion in savings from a five-year freeze on domestic programs that account for one-tenth of the budget.
- The other one-third of deficit savings would come from tax increases such as limiting the tax deductions high income taxpayers.
- Obama also proposes raising taxes on energy companies.
Source: "Obama Sends Congress $3.73 Trillion Budget," Associated Press, February 14, 2011.
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