Pres. Obama Reveals $3.6 Trillion Budget Plan

WASHINGTON (AFP) – US President Barack Obama unveiled a 3.606 trillion dollar budget Thursday that outlines aggressive plans to boost the recession-stricken US economy and overhaul its health care system.

The fiscal 2010 spending plan encompasses Obama's efforts to pull the country out of its worst economic crisis since the Great Depression of the 1930s.

"The time has come to usher in a new era -- a new era of responsibility in which we act not only to save and create new jobs, but also to lay a new foundation of growth upon which we can renew the promise of America," Obama said in his budget message.

"This budget is a first step in that journey."

The spending would mark a decline from the 3.724 trillion dollars projected for the current fiscal year, which ends September 30.

In the current fiscal year, begun under former president George W. Bush, the new budget projects a deficit of 1.750 trillion dollars. That amounts to 12.3 percent of gross domestic product, the biggest since World War II.

In fiscal year 2010 which starts October 1, the budget forecasts a deficit declining to 1.171 trillion dollars.

The projected spending would include some 200 billion dollars to fight wars in Iraq and Afghanistan over the next 18 months, and a huge 634 billion dollar, 10-year fund to pay for health care reforms, a key plank of Obama's election campaign.

Overall, the president is seeking 663.7 billion dollars in defense spending for fiscal 2010 that includes the costs of wars in Iraq and Afghanistan, an increase of roughly 1.5 percent.

Obama has also asked for 250 billion dollars to be set aside if needed to bailout the US financial industry, on top of the 700 billion dollars already committed to the effort.

The Obama administration currently has no plans to use the extra bailout money, but wants the funds included as an "overly conservative" place-holder just in case, a senior administration official said.

The budget is due to set the stage for a fierce battle in Congress, with many Republicans angered by plans to raise taxes on the country's wealthiest, seen as one of the ways of increasing revenues.

Only three Republican senators rallied behind Obama's 787-billion-dollar stimulus plan to revitalize the ailing US economy.

The budget attempts to fulfill a campaign pledge to raise taxes on Americans earning more than 250,000 dollars a year from 35 percent to just under 40 percent, yielding some two trillion dollars in 10 years.

Major savings are expected by winding down US military efforts in Iraq, which currently soaks up some 170 billion dollars a year.

Obama's request includes 75.5 billion dollars for this year to send more US troops to Afghanistan, officials said.

The president also seeks 130 billion dollars for Iraq and Afghanistan for the 2010 budget and set operations in those countries at 50 billion dollars annually in the next several years.

An Obama administration official, speaking on condition of anonymity, said the massive health care fund would be financed by raising taxes on highest earning Americans and by savings from existing health care programs.

So, gone are the Bush tax cuts. In are increased taxes and more government spending. As stated in the NY Times:

In a document summarizing its proposals, the White House said it would finance coverage for the uninsured in part by “rebalancing the tax code so that the wealthiest pay more.”

To narrow the deficits, the president proposed $636.7 billion in tax increases on the wealthy over the next 10 years, largely by reversing tax cuts passed by President George W. Bush on taxpayers who make $200,000 or more, or $250,000 for married couples. The top income tax bracket would go back up to 39.6 percent from 36 percent and capital gains and dividends for those over the income limits would be taxed at 20 percent.

The White House also proposed tax provisions that would raise $353.5 billion on over 10 years by repealing credits and reductions for oil and gas companies, toughening tax collections and other changes in tax law.

On the other side of the ledger, Mr. Obama would cut taxes for lower and middle class Americans by $770.1 billion over 10 years and for businesses by $149.4 billion.

So, for a couple making $250,000 a year, Obama's plan raises their taxes by $9,000 a year. In one of the toughest economic times, Obama is going to raises taxes a MINIMUM OF $9,000 PER YEAR FOR A MARRIED COUPLE MAKING $250,000. In a city like New York, $250,000 a year is not a lot of money for a couple, when the average 1 bedroom apartment goes for close to $1,000,000.00 (and no, I didn't add a few extra zeroes.) Also look for Obama to cut the mortgage interest tax deduction, as many liberals feel this is highly regressive.