Monday, February 1, 2010

2011 Budget: $3.8 trillion includes $100 billion for jobs with a $1.6 trillion deficit

Obama's 2011 budget: $3.8 trillion includes $100 billion for jobs with a $1.6 trillion deficit.

President Obama proposed a $3.8 trillion budget for Fiscal 2011, including a projected record deficit of $1.6 trillion.

The budget, which would begin in October, includes about $100 billion in additional tax cuts and spending on public works projects that the president hopes will spur jobs.

The Obama administration said its proposed tax cuts for families and businesses would total about $300 billion over the decade, including a third-year extension of the "Making Work Pay" tax credit designed to offset payroll taxes for 110 million lower- and middle-income workers.

Also proposed is an increase in child care tax credit, eliminating capital gains taxes on new investments for small businesses, and extending through the current fiscal year a holdover from the stimulus package that allows small business to write off in the first year up to $250,000 in equipment investments.

The president also wants $25 billion for state governments hit hard by the recession to help offset Medicaid funding costs for the poor.

Obama plans to appoint a new debt commission to come up with recommendations on how to meet his previously announced pledge to bring the deficit figure down to the equivalent of 3 percent of GDP by 2015.

The Washington Post leads with the budget's total and its goals:

The $3.8 trillion budget blueprint President Obama plans to submit to Congress on Monday calls for billions of dollars in new spending to combat persistently high unemployment and bolster a battered middle class. But it also would slash funding for hundreds of programs and raise taxes on banks and the wealthy to help rein in soaring budget deficits.

To put people back to work, Obama proposes to spend about $100 billion immediately on a jobs bill that would include tax cuts for small businesses, social-safety-net programs, and aid to state and local governments. To reduce deficits, he would impose new fees on some of the nation's largest banks and permit a range of tax cuts to expire for families earning more than $250,000 a year, in addition to freezing non-security spending for three years.

The New York Times, however, leads with the deficit:

The deficit for the current fiscal year will reach nearly $1.6 trillion, a new post-World War II high, with the addition of about $100 billion in additional tax cuts and public works spending that President Obama has proposed to spur job creation, according to the administration.

But that will be the peak, officials say. The new budget that Mr. Obama is proposing on Monday for fiscal year 2011, which begins in October, will put the government on a “smooth glide path” to lower annual deficits over the next decade, according to his budget director, Peter R. Orszag.

We are slowly crawling out of the worst economic crisis since the Great Depression. But, watch Republicans start railing against the deficit and the national debt, as if they played no role in it. They did.

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