President Obama today unveiled a proposed $3.55 trillion budget for the coming fiscal year that he said discards "dishonest" accounting practices of the past and makes "a historic commitment to comprehensive health care reform."
The plan would effectively raise taxes on the wealthiest Americans and trim Medicare costs to help pay for what the administration calls a $634 billion "down payment" on a universal health care program. It would also extend tax cuts for middle-class Americans while closing corporate tax loopholes and reducing some agricultural subsidies, officials said.
In addition to the budget for fiscal 2010, the administration also proposes a $3.94 trillion budget for the 2009 fiscal year that ends Sept. 30. The figure includes an additional $250 billion that could be used to bail out struggling banks, as well as $410 billion in an omnibus spending bill that the House approved this week to fund major government agencies through the remainder of the fiscal year. Congress has not yet passed a 2009 budget, but has funded the operations of the government with continuing resolutions through March 6.
Obama's spending plans would push the 2009 budget deficit to a massive $1.75 trillion, officials said this morning. The government's yearly shortfall would equal 12.3 percent of the nation's annual economic output. Such a percentage has not been seen since the end of World War II, when the deficit came to 21.5 percent of GDP.
The administration says about $1.2 trillion of that deficit was inherited from the Bush administration and that some of the rest comes from stimulus measures aimed a jump-starting the flagging economy.
According to Office of Management and Budget Director Peter Orszag, Obama has inherited "a pair of trillion-dollar deficits." One of them is the U.S. economy's shortfall in output, and the other is the budget deficit, he said.
"All told, we are showing $2.7 trillion in costs, in this budget, that were excluded from previous budgets," Orszag told reporters. "And I think that's a mark of the honesty and responsibility contained in this document."
Congressional Republicans immediately denounced Obama's budget proposal, saying it contains excessive spending and tax increases.
"I have serious concerns with this budget, which demands hardworking American families and job creators turn over more of their hard-earned money to the government to pay for unprecedented spending increases," Senate Majority Leader Mitch McConnell (R-Ky.) said in a statement.
"The American people deserve a budget that puts fiscal discipline and jobs first," said Rep. Mike Pence (R-Ind.). "The budget offered by the Obama administration fails on both counts." Calling the plan a "prescription for economic decline," he said Americans "know we cannot tax, spend and borrow our way back to a healthy economy."
The new budget includes nearly $534 billion for the Defense Department in 2010, up 4 percent from 2009. The administration is requesting $75.5 billion for the rest of 2009 to pay for the wars in Iraq and Afghanistan, and $130 billion for 2010.
Under the 2010 budget, the Army and Marine Corps increase in size, and military personnel get a 2.9 percent pay increase. Federal civilian employees receive increases of up to 2 percent.
via : WashingtonPost
