Obama To Propose $3.8 Trillion Budget
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President Barack Obama plans to propose a budget Monday of $3.8 trillion, including $100 billion in additional stimulus spending to help maintain the momentum of the fragile economic recovery.
The proposal forecasts that the deficit this year will reach a record level of $1.6 trillion and represents 10.6 percent of the U.S. gross domestic product.
The plan will impose more than $800 billion in higher taxes against those earning $250,000 annually to help reduce the shortfall. Taxes will also be raised for banks that were bailed out by the government, as well as oil, gas and coal industries.
"We're trying to accomplish a soft landing in terms of our fiscal trajectory," Peter Orszag, director of the White House Office of Management and Budget, said.
The plan is attempting to balance a tightening of the government's belt while also trying to boost the economy and create the jobs that will be on voter's minds come midterm elections later this year.
The President wants to impose a spending freeze on discretionary spending, excluding defense and security, to help address the shortfall. The freeze will still allow for budget increases in programs such as education and research and development.
Orazag said that the plans by the administration to implement deficit-reduction strategies will be slow, as to not stifle the economy as it regains footing.
"The worst thing we could do is act to quickly and throw the economy back into recession," Orszag said. “But we do need to be starting, and so that's why you see this selective approach where we are beginning the process in certain components of the budget."
The administration’' plan calls for extending stimulus plans previously set forth including the "Making Work Pay" tax credit for individuals and couples, and the Build America Bonds program.
The plan will call for the termination of 120 government programs, reductions and other cost cuts that will save an estimated $20 billion.
The War on Terror will cost an estimated $159.3 billion next year, while the basic defense budget will amount to $549 billion, a 1.8 percent increase year-over-year.
The total budget has more than doubled from the $1.9 trillion in 2001.
The proposal forecasts that the deficit this year will reach a record level of $1.6 trillion and represents 10.6 percent of the U.S. gross domestic product.
The plan will impose more than $800 billion in higher taxes against those earning $250,000 annually to help reduce the shortfall. Taxes will also be raised for banks that were bailed out by the government, as well as oil, gas and coal industries.
"We're trying to accomplish a soft landing in terms of our fiscal trajectory," Peter Orszag, director of the White House Office of Management and Budget, said.
The plan is attempting to balance a tightening of the government's belt while also trying to boost the economy and create the jobs that will be on voter's minds come midterm elections later this year.
The President wants to impose a spending freeze on discretionary spending, excluding defense and security, to help address the shortfall. The freeze will still allow for budget increases in programs such as education and research and development.
Orazag said that the plans by the administration to implement deficit-reduction strategies will be slow, as to not stifle the economy as it regains footing.
"The worst thing we could do is act to quickly and throw the economy back into recession," Orszag said. “But we do need to be starting, and so that's why you see this selective approach where we are beginning the process in certain components of the budget."
The administration’' plan calls for extending stimulus plans previously set forth including the "Making Work Pay" tax credit for individuals and couples, and the Build America Bonds program.
The plan will call for the termination of 120 government programs, reductions and other cost cuts that will save an estimated $20 billion.
The War on Terror will cost an estimated $159.3 billion next year, while the basic defense budget will amount to $549 billion, a 1.8 percent increase year-over-year.
The total budget has more than doubled from the $1.9 trillion in 2001.
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