by Mark Silva and Julian Barnes and updated
President Barack Obama, proposing his first new budget today - a $3.55-trillion plan delivering new record levels in both federal spending and deficits - called on Congress to make a commitment to not only fiscal responsibility in the coming year, but also healthcare for more Americans - and new taxes for the wealthiest - in the years ahead.
"In the end, a budget is more than simply numbers on a page,'' the president said this morning. "It is a measure of how well we are living up to our obligations.''
While the president is touting "a new era of responsibility'' with this budget, a theme resonant of his inaugural address last month, the short-term gap between what the federal government collects in revenue and what it is spending reaches a soaring level this year: A runaway record, $1.75-trillion annual deficit. The budget envisions a deficit of $1.17 trillion in 2010.
The president also is pledging to cut the deficit in half by the end of his four-year term, to $533 billion in the 2013 budget year - leaving a gap still larger than the record budget deficits recorded by his predecessor, former President George W. Bush, and Congress. The deficit for 2008 stood at $459 billion, a record then. This year's: $1.752 trillion.
The president proposes $2 trillion cuts in spending over the coming decade to help restore a not-quite-near-balance in spending and revenue.
"Having inherited a trillion-dollar deficit that will take a long time to close, we have to focus on what will move the economy forward,'' Obama said today. "I don't think we can continue on our current course... that means cutting what we don't need to pay for what we do.''
In a brief statement from the Eisenhower Executive Office Building, headquarters for the presidential budget office where Obama's aides will roll out the broad outline of their new, $3.55-trillion-plus spending plan for 2010 today, the president said that he is delivering an "honest'' budget.
"For too long our budget has not told the whole truth of how our precious tax dollars are spent,'' said Obama, who is including the costs of the war in Iraq in his spending plan - Bush sought and won supplemental funding for the war outside of the budget. "We need to be honest with ourselves about what costs are being racked up.''
"We are winding down the war,'' Office of Management and Budget Director Peter Orszag noted today, "and that will reduce costs over time.''
See the White House's budget summary and read on here:
The president's proposed budget boosts taxes on the wealthiest Americans, while cutting federal Medicare payments to insurance companies and hospitals to make room for a $634-billion commitment to "universal healthcare" in the coming decade. It's a set-aside: A commitment of money for health care plans that remain to be negotiated with Congress.
"With this budget, we are making a historic commitment to comprehensive healthcare reform,'' Obama said. "Over the long-term, it will also help us bring down our deficit.''
That health care plan is phased I over several years, with projected savings from proposed reforms providing roughly half of the money for an expansion of health care to more Americans and $317.8 billion in new tax revenues providing the rest. Under the budget, the new tax revenues are not slated to start flowing until 2011 -- $11 billion the first year - and then grow with the repeal of Bush's tax cuts for the wealthiest to $34 billion in 2013.
The White House - this one as well as its predecessors - like to portray the budget deficit as a proportion of the nation's overall economy, a measure that investors also watch in the interest of long-term markets.
This year, the president's budget reports, the 2009 fiscal deficit of $1.752 trillion represents 12 percent of the nation's Gross Domestic Product. In the 2010 budget, the projected deficit of $1.171 trillion represents 8 percent of the projected GDP. By fiscal 2013, when the president pledges to cut the deficit in half , that deficit projection is 3 percent of GDP.
This is only the start of a budget debate that will consume the Democratic-controlled Congress for months, with Republicans in both houses lining up against the White House's spending initiatives and tax increases - just as all the House's Republicans and all but three of the Senate's Republicans opposed Obama's $787-billion economic stimulus.
Indeed, the document that the White House is releasing today, a 134-page outline of the president's plans, is a mere blueprint of a plan that will emerge from the president's Office of Management and Budget in April.
Signaling an end to an eight-year run of rapidly escalating defense costs, the Pentagon is requesting a budget with only minimal growth in total spending, including the costs of the wars. The total request will rise to $663.7 billion in 2010 from $654.4 billion in this fiscal year.
The explosion in defense spending during the Bush Administration was driven by the expense of the wars in Iraq and Afghanistan, the need to quickly grow the Army and Marine corps and the urgency to roll out new weapons for a counter insurgency fight the military had not expected a decade ago.
But with Obama preparing to speed up the withdrawal of combat forces from Iraq, the Pentagon is predicting that their war costs will begin to drop. The Pentagon will ask for $130 billion to fund the war costs in 2010. That is down from the war costs for the current fiscal year, projected to be $141.4 billion. But defense officials cautioned those figures were not directly comparable because some costs are being moved into the regular budget.
The non-war related portion of the budget will grow 4 percent, or 2.1 percent taking inflation into consideration, from $513 billion to $533.7 billion. But some of that growth may be due to moving costs from the war funding request and into the base budget, a defense official said.
The Bush administration made its war funding requests in the form of supplemental request that was not always subjected to the same scrutiny as the regular budget or the same Congressional rules. But defense officials said the war costs would no be presented as part of the President's overall budget and were being renamed the "Overseas Contingency Operations Request."
Few details of what precisely the Pentagon intends to spend its requested money on were clear. President Obama and Defense Secretary Robert M. Gates have said they will not trim the size of the military, preventing the Pentagon from halting the growth in personnel costs, the largest part of the budget.
But Gates has signaled he is preparing to make "hard choices," killing a variety of programs in order to shrink the budget. And in his address to Congress on Tuesday, Obama said he would cut "Cold War" weapons systems that have little utility for today's fight.
The Pentagon is keeping a tight hold on its spending plans, trying to prevent members of congress and the defense industry from intervening to save favorite weapons programs. The defense official said although many spending decisions have not been made, the Pentagon was well aware it needing to constrain spending growth.
"We are not operating in a fiscally unconstrained environment," said a defense official, "So there are difficult choices to be made."
It includes the projected benefits - and costs - of the economic stimulus that Obama signed into law after four weeks in office, including extended COBRA insurance coverage for people who have lost their jobs.
"I have some good news to report,'' the president said today, reporting on one of the first flows of funding from the "American Recovery and Reinvestment Act" that he pushed through Congress.
Starting today, he said, the recently unemployed will benefit from a COBRA subsidy that will make healthcare affordable.'' It will help seven million Americans who have lost their jobs keep their healthcare.
Comments
Michael Sparxx has the correct reaction to President HopeyChangey's speech:
Inspired. Psyched, and a feeling of renewed hope for the future!!
Those are the feelings I have 2 days after watching President Obama’s first official unofficial address to Congress. Like MSNBC talk show blow hard Chris Matthews, I too have felt that tingle up and down my leg and have seen the light!
Why work anymore? I’m going to light up a stogie, sit back and let the middle class work for me! Obama is promising Universal Health care. Free public education THROUGH college! My 3 1/2 year son has it made.
If I need money or make any bad business decisions, I’ll just ask for a bailout like everyone else. People who can’t afford the homes they are in, are getting bailed out. Lenders who gave them the money who shouldn’t have approved such loans is getting bailed out too. So, why not me?
I love this new America, where failure = success, and hard working means making less!
Posted by: HopeNChange | February 26, 2009 10:50 AM
"Having inherited a trillion-dollar deficit that will take a long time to close, we have to focus on what will move the economy forward,''
-President Barack Obama
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And the 2012 prez campaign goes on..
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No doubt that the previous admin did not veto spending bills as he should have... republicans have paid for this departure from conservative values in the last two elections-I am hopeful that acting in the minority party they all collectively grow a pair and start voting like their consituency expects them to...
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But completely ignored has been the spending generated from a Dem led congress in the last two years with THIS President as a voting senator...
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If Obama wants to be critical of the orgy of spending over the last few years-and be intellectually honest, he has no choice but to veto and stop this massive spending bill... I won't hold my breath..
Posted by: heartburn | February 26, 2009 10:52 AM
Bush's deficit did not include Iraq war, therefore, to say that his deficit was 457 billion is disingenuious. With the war and disaster costs included in budget 2009 deficit is 1.3 trillion.
Posted by: Janet Cafiero | February 26, 2009 11:32 AM
If $1.75 trillion is the right number for you lefties, is $2 trillion going to be too much, haw about $3 trillion?
Where is the line you are not going to allow this Congress to cross? Let's say it's $4 trillion (which is where I think we will be at the end of term), will that start to make you a little upset?
Or will you continue to make all these lame excuses for the need for the pork bill, and pork bill II, and III, etc.
Posted by: Greg | February 26, 2009 11:59 AM
The actual deficit will be much higher than predicted, for a couple reasons.
1. Government "savings" never actually materialize, and
2) The "rich" will be paying much less in taxes than forecast. They aren't as stupid as the greedy people who believe in the failed soak the rich schemes. They will hire better lawyers and simply not work as much, or deploy capital as freely in new or expanding enterprises.
Posted by: Thin The Herd | February 26, 2009 12:14 PM
Anything labelled a "trillion" is not a short term gap. This novice communist is far worse than could have been imagined. Kill the private sector and you will kill this country.
Posted by: Steve | February 26, 2009 12:24 PM
This budget/spending orgy is like an alcoholic drinking his way to sobriety. Why not lower taxes and government spending and let the consumers spend money the way they want to spend it?
The people have a lot more sense than congress. -actually my dog has more sense then the current congress.
Posted by: Charles | February 26, 2009 12:28 PM
Repubs shut your **** mouths!!! Your boy George caused this catastrophe!!! What do you want Obama to do??? Let all the Banks, Car Companies, and 30% of homeowners all fail at the same time???? Don't you idiots realize that that WILL destroy our economy completely!! Obama STILL has to pay for George's War in Iraq, still has to pay for Afghanistan (that George was losing because he bogged us down in Iraq) AND has to save the US economy. That will require MAJOR spending!!!! You Rethugs weren't complaining when your wealthy sons were making millions on Wall Street for shuffling money. You werent complaining at the Billions being wasted in Iraq. You werent complaining when we were losing the war in Afghanistan because all our money and troops were in Iraq. You werent complaining when Corporate America hired illegals by the millions to boost their profits and then took those profits out of the country so they wouldn't have to pay taxes to the country that spawned and protected them!!! *** Republican dogs, ***!!
Posted by: thetruth | February 26, 2009 12:36 PM
So we are basically moving our troops from one war to another? If the lefties want our troops home, how is sending them to Afghanistan bringing them home? Oh -right - because it non-republicans making the decision. I am mad that my money is going to all the pork. One of these new agencies needs to print a detailed story where all "added pork" is being spent. I guess busting your butt, working, paying one's own way through school and actually living within one's means doesn't mean squat anymore. Our grandparents who lived through the Depression are rolling in their graves over this. Oh well - Hope and Change - what the people wanted. Change isn't always for the better. In the words of the Who..."meet the new boss, same as the old boss."
Posted by: Rosie | February 26, 2009 1:01 PM
could one of the obamabots explain why a bush deficit is bad while an obama deficit that beggars anything ever done by bush is good? It's a little puzzling to me. Does he intend to actually destroy this country? can we have that thrifty bushII back.
Posted by: Ed | February 26, 2009 1:02 PM
could one of the obamabots explain why a bush deficit is bad while an obama deficit that beggars anything ever done by bush is good? It's a little puzzling to me. Does he intend to actually destroy this country? can we have that thrifty bushII back.
Posted by: Ed | February 26, 2009 1:02 PM
Black, a 55-year-old former Ku Klux Klan Grand Wizard, isn't the only person who holds such firm beliefs, according to the Southern Poverty Law Center, which today released its annual hate group report.
The center's report, "The Year in Hate," found the number of hate groups grew by 54 percent since 2000. The study identified 926 hate groups -- defined as groups with beliefs or practices that attack or malign an entire class of people -- active in 2008. That's a 4 percent jump, adding 38 more than the year before.
What makes this year's report different is that hate groups have found two more things to be angry about -- the nation's first African-American president and an economy that is hemorrhaging jobs.
Posted by: swamp republican | February 26, 2009 1:16 PM
Obviously "thetruth" doesn't know their *** from a hole in the ground. That's a typical rant from the uninformed left. You only want to believe what the biased press wants you to believe. Look at the facts before you spew out your garbage. The whole housing mess started way back in the late 1990's and it's very well documented if you took the time to find out for yourself. Next you will probably try to convince everyone that "Our boy George" was president then. Give me a break !!!
Posted by: Roger Rabbit | February 26, 2009 1:23 PM
"You werent complaining when Corporate America hired illegals by the millions to boost their profits and then took those profits out of the country so they wouldn't have to pay taxes to the country that spawned and protected them!!! *** Republican dogs, ***!!
Well done fool, by your 'reasoning', somehow, someway, the HR depts at our corporations suddenly became stacked with Republicans. Such a statement is not only untenable, it shows just how dumb and blind your ideology hade made you.
Time to PUT UP OR SHUT UP: Show us the names of these people hiring all these illegals and HOW THEY VOTED. Come on you surely can back your ignorant mouth with some real cold hard facts.
Posted by: JoeBraxton | February 26, 2009 1:29 PM
The only silver lining for all the wasteful spending in recent years (supported by BOTH parties) was that at least the new democratic controlled government could not implement new massive government programs at this time...or so I thought.
Posted by: Ted | February 26, 2009 1:35 PM
Well, that blows Bush's out of the water.
Posted by: Jeff | February 26, 2009 1:42 PM
Ed, The Obama budget deficits are better than Bush's because we spending the money in the US and not Iraq. There will be much less wasted because the corruption in the US is considerablly less. There have been estimates that 1/3 of all the money spent in Iraq was stolen or wasted.
Posted by: pd | February 26, 2009 1:54 PM
I like the increase in NASA funding. It's pocket change when compared with the whole of the budget, and maybe with right-wing shills like Griffin pushed out, NASA can start thriving again. I'm all for space exploration and keeping our manned and unmanned space capabilities up.
I'll still have to be sold on the bank bailouts. On the bright side, it looks like the banks will be getting the latex glove treatment in exchange for the money they need, and they'll be getting regulated (I think regulation's a certainty). I think that some taxpayer money will have to be used to clean up that mess, but hopefully, Obama and Geithner will come up with a better solution. So far, they haven't come up with enough specifics to sell me yet.
Posted by: Ned Flanders | February 26, 2009 1:56 PM
And, he's just getting started.
Any mention of inherited deficite should include a bigger amount than Bush from the liberal loser Clinton.
Posted by: Tim | February 26, 2009 2:00 PM
Golly, could someone please take the caffeine away from "thetruth?" Now Bush is to blame for Obama increasing the deficit by five fold? No, this is Obama's deficit, Obama's recession, Obama's war in Afghanistan, Obama's goofs on trusting Pelosi to write the stimulus, Obama's Cabinet mistakes and, of course, Obama's mistake on who invented the auto. How sweeeeeet it is!
Posted by: Midway | February 26, 2009 2:04 PM
You guys on the right just keep reminding us on the left or in the middle how out of your minds you really are!
1) HopeAndChange: The Americans (not Iraqis) that may lose their homes are not being bailed out completely, The plan is to negotiate with their banks to lower their interest thus lowering their initial payments.
2) Heartburn: Last time I checked in the last two years the Republicans voted yes on the Bush Wall street bailout, Including McCain (the loser of the election).
3) Rosie: The Republicans have been making the decisions for the last 10 years- you see where that got us. Time for a change in direction and lets see where that will take us first before we criticize something we dont know yet!
3) Ed: The Bush deficit is bad because he inherited a surplus and covered up billions in war expenses not previously included in the actual deficit! . President Obama hasnt even been in office for 3 months yet let alone 4 years. Same as above, lets see first what happens before we judge people!
And finally 5: The Truth: AMEN! But trust me, no matter what you say or how you put it these uneducated and blind-by-the-right people will never understand. Or, maybe we should get someone to explain it to them like a 5th grader, same way as Gov YoYo from Louisiana's speech.
Posted by: Scot S. Blakeley | February 26, 2009 2:12 PM
It is becoming obvious that our president understands NOT what he says but simply reads the teleprompter. How can these statements make and sense?? He's still in campaign mode - promise promises - they'll never expect them to come true anyway.
""Having inherited a trillion-dollar deficit [was not a trillion dollar deficit] that will take a long time to close, we have to focus on what will move the economy forward,'' Obama said today. "I don't think we can continue on our current course..[adding 3 more trillion to the deficit, higher than all combined deficits in the last 30 years] that means cutting what we don't need to pay for what we do.''
So far, all he's done is add to the spending with PORK for his campaign contibutors and supporters and promises to cut some things down the road?
There are tax breaks stuck in the stimulus legislation for the Hollywood set - the Clooney's, the Streisand's, the Pitt's, the Winfrey's, the Damon's, don't forget the Wil I Am's and so on. Yet he's going to gouge people who earn a good living to prop up a ready made voting populous dependant on his government programs and policies to survive.
Posted by: springfield | February 26, 2009 2:14 PM
Why does Obama keep using the word "inherited"? I thought he was in the Senate before becoming President. He was just as responsible as the others for the mess we are in.
Posted by: Greg | February 26, 2009 2:16 PM
Well, Greg, some would say he is not responsible for this mess because he was one of the few who voted against this costly, irresponsible war.
Posted by: Laura | February 26, 2009 2:47 PM
the spending we're talking about has nothing to do with iraq. it dwarfs the iraq war spending. as has been repeated as nauseum, Japan tried what obama is doing. they failed.
Posted by: Ed | February 26, 2009 2:57 PM
Let us strip any racial perjorative from the image of a monkey for just the briefest moment, and then indicate that no monkey is stupid enough to write this budget when there is not sufficient funding to pay for any of it. My great grandkids--feel free to characterize them as monkeys--will be paying the cost of this stupidity. Thanks a whole freaking lot, Butch!
Posted by: Tim from Downers | February 26, 2009 3:11 PM
2) Heartburn: Last time I checked in the last two years the Republicans voted yes on the Bush Wall street bailout, Including McCain (the loser of the election).
Posted by: Scot S. Blakeley | February 26, 2009 2:12 PM
Scot- if you actually think after you read someones post instead of shooting off a knee jerk rep -bad dem good peice of drivel you would have noticed that I am probably more disappointed by the recent history of Rep spending than you ...which makes the new orgy of spending that pretty much doubles up our grandchildrens debt really an amazing feat - all w/o a second look from acolytes like yourself..
As far as your repsonse, Wow! imagine that! Your rationalizing what the current admin does based on what the previous admin did.. instead of defending Obamas actions on its merits good or bad. The standard Obamabot template answer to whatever your fearless leader does.
So Scot- is the only standard you hold for Pres Obama is that he is equal or marginally better than Bush?
Posted by: heartburn | February 26, 2009 3:55 PM
Ed, Sorry you don't want to hear about the one trillion dollars spent in Iraq but it is a fact. The money is gone and can not be used to rebuild America during this resession. Obama is not doing the same thing that Japan did. There is a speedy three pronged approach 1. Stimulas, 2. Removing bad assests from the banks 3. Home price support with foreclosure reductions. Japan slowly stimulated the economy with public works projects while keeping toxic assest on the banks books.
Posted by: pd | February 26, 2009 4:12 PM
Laura - he couldn't have voted for this costly, irresponsible war because he was not a State Senator when it started. He was still organizing ACORN voter fraud at the time but you could research his voting record (lack thereof) during his two vacant years in the Illinois Senate.
Get off the kool-aid Laura.
Posted by: springfield | February 26, 2009 4:20 PM
the buget cut seems like it will cause great expense in our already failing economy
Posted by: brooke | July 28, 2009 11:26 AM