Tuesday, February 2, 2010
Barack Obama, the US President, has announced a budget plan worth US$3.83 trillion for next year. The budget includes additional spending for job creation, but cuts for other areas. The president also forecast that the national debt would reach $1.56 trillion in 2010.
Among the cuts proposed include scrapping the Constellation program, a plan to send astronauts to the Moon by 2020, and capping some domestic spending programmes for three years. Overall, the cuts are predicted to save $250 billion. There is also $100 billion in tax incentives aimed at hiring workers. US residents with incomes of over $250,000 per annum, however, would be given higher taxes, partially offsetting that.
Other increases in the proposed budget include; $48 billion for veterans’ medical care, or an increase of eight percent; $53 billion for homeland security; $310 million to shut down the Guantanamo Bay prison. He also suggested freezing spending for some federal programs and departments and programs for three years, exempting Medicare, Social Security, and national security.
In order for the budget to take effect, Congress must approve it by the beginning of the fiscal year starting October 1.
When introducing the budget, Obama stated that “we […] continue to lay a new foundation for lasting growth. Just as it would be a terrible mistake to borrow against our children’s future to pay our way today, it would be equally wrong to neglect their future by failing to invest in areas that will determine our economic success in this new century.”
At the White House, he also commented: “It’s a budget that reflects the serious challenges facing the country. We’re at war. Our economy has lost seven million jobs over the last two years. And our government is deeply in debt after what can only be described as a decade of profligacy […] “It’s very important to understand,” the president said. “We won’t be able to bring down this deficit overnight, given that the recovery is still taking hold and families across the country still need help.”
The budget plan reads: “These estimates do not reflect any policy decisions about specific military or intelligence operations, but are only intended to indicate that some as-yet-unknown costs are anticipated.”
| It will be impossible to bring the deficit down unless the economy is up. The budget the president is sending Congress today puts a priority on those objectives | ||
“It will be impossible to bring the deficit down unless the economy is up. The budget the president is sending Congress today puts a priority on those objectives.” The president blamed the previous George Bush administration for the financial difficulties, saying: “Over the course of the past 10 years, the previous administration and previous Congresses created an expensive new drug program, passed massive tax cuts for the wealthy and funded two wars without paying for any of it, all of which was compounded by recession and by rising health care costs. As a result, when I first walked through the door, the deficit stood at $1.3 trillion, with projected deficits of $8 trillion over the next decade.”
“It will be impossible to bring the deficit down unless the economy is up. The budget the president is sending Congress today puts a priority on those objectives. It keeps one eye on the economy and the other on the deficit,” remarked Democrat Representative John Spratt from South Carolina.
|
HAVE YOUR SAY
|
|
|
Do you agree with this budget plan?
|
|
|
Add or view comments
|
|
Republican senators, however, criticised the plan, citing the proposed tax increases, and suggesting that the deficit is an indication Obama isn’t able to control government spending. “President Obama is submitting another budget that spends too much, taxes too much and borrows too much,” said the House Minority Leader, John Boehner. “Serious fiscal responsibility requires more than a few cuts here and there at the margins. Republicans have proposed adopting strict budget caps that limit federal spending on an annual basis and are enforceable by the president.”
| this budget provides a startling figure that should stop us all in our tracks | ||
Senate Minority Leader Mitch McConnell commented that “this budget provides a startling figure that should stop us all in our tracks. According to the administration’s budget, the interest on the federal debt is expected to be nearly 6 trillion dollars over the next decade. We’ve all heard about interest-only loans, but this is the equivalent of an average of $600 billion dollars in interest every year. That’s an astonishing number.”
Republican Senator Judd Gregg also was critical of the plan: “These circumstances call for a bold, game-changing budget that will turn things around, put in place a plan to restrain spending, reduce the debt and tackle the big entitlement programmes that are growing out of control. Instead, the president has sent us more of the same.” He described the financial situation as being a “quagmire”.
Obama’s proposal to pull the space plan also drew fire from Republicans. “The president’s proposed Nasa budget begins the death march for the future of US human space flight,” said Republican Senator Richard Shelby. Obama, however, described the Constellation programme as being “over budget, behind schedule, and lacking in innovation”, and said it was draining resources from other activities at NASA.