Thread: Republicans criticise Obama's massive $3.5 Trillion budget

Republicans criticise Obama's massive $3.5tn budget

Party leaders expressed anger as the US president's budget headed to Congress

Ewen MacAskill in Washington guardian.co.uk,
Thursday 26 February 2009 19.12 GMT



Barack Obama unveils the 2010 budget in Washington. The proposal projects a $1.75tn deficit. Photograph: Jim Watson/AFP/Getty Images

President Barack Obama embarked on the biggest redistribution of wealth from the rich to the poor in US history today when he unveiled his first budget which will amount to a staggering $3.5tn (£2.4tn).

Raising fears among Republicans that he could turn out to be one of the most liberal presidents ever, Obama proposed $1tn in tax rises over the next decade.

But his budget, sent to Congress today, will face enormous resistance from Republicans, who expressed anger at the scale of the spending and tax increases.

The budget amounts to a huge gamble by Obama that, if it goes wrong, could leave the US economy limping badly for years and losing ground to competitors.

The figures in the budget are on a scale that would have been almost unimaginable a year ago. One of the biggest expenditures is $634bn to be directed towards fulfilling Obama's campaign pledge to make a start on providing universal healthcare.

Obama, speaking at the White House before the budget was released, said, that in spite of recession, it was time to address the fundamental problems facing America. "There are times when you can afford to redecorate your house and there are times when you have to focus on rebuilding its foundation."

This meant, he said, "some hard choices" lay ahead. To try to pay for his ambitious spending plans, he intends to rip into Pentagon spending, with expensive projects such as the F-22 fighter jet at risk.

Also to be targeted are farm subsidies that have existed for decades and tax-breaks for corporation.

But the most contentious issue is his planned increase in taxes for anyone earning more than $250,000 a year from 2011.

The president faces a marathon battle with Republicans, who are committed to limited government and lower taxes. Mitch McConnell, leader of the Republicans in the Senate, said: "I have serious concerns with this budget, which demands hardworking American families and job creators turn over more of their hard-earned money to the government to pay for unprecedented spending increases."

One of the more staggering figures to emerge from the budget is that the US deficit for this year is set to rise from an already huge $1.2tn inherited from President George Bush to $1.75bn, much higher than had been anticipated. The total deficit for the next decade is predicted to top out at around $9bn.

In spite of this, the Obama administration insisted it could begin to reduce the deficit next year, based on assumptions that the economy will start to recover by then.

Obama's chief economic adviser, Christina Romer, said she expected the recession to bottom out this summer and that GDP will grow by 3.2% next year but that unemployment, predicted to top out at 8%, would only come down slightly.

The president managed to get his economic stimulus package, aimed at helping the US out of recession, through Congress in near record time, just over a month, but his budget will face repeated delaying action by Republicans.

Although the Democrats enjoy an overwhelming majority in the House, they are dependent on winning over a handful of Republicans in the Senate.

John Boehner, the Republican leader in the House, said: "Everyone agrees that all Americans deserve access to affordable healthcare, but is increasing taxes during an economic recession, especially on small businesses, the right way to accomplish that goal?" His colleague, Eric Cantor, the Republican whip in the House, described the budget as misguided and dangerous.

The Democrats, many of them as liberal as Obama, will want to see as much of the budget get through Congress as possible but will have to make some concessions to try to woo moderate Republicans.

Obama claimed budgets under Bush involved "dishonest accounting" because they had not included the costs of the wars in Iraq and Afghanistan but his does. The budget projects the cost of the wars this year will be $141bn.

http://www.guardian.co.uk/world/2009/fe ... rack-obama

Obama Shifts Course with $3.5 Trillion Budget

President's Budget Proposes $989 Billion in New Taxes During Next 10 Years

By JAKE TAPPER
Feb. 26, 2009
191 comments

President Obama's $3.5 trillion budget proposal, the largest in history, presents a dramatic break from policy and a shift in governmental priorities. The administration is attempting to redirect vast sums of money from businesses and wealthier individuals to those with lower incomes and enact ambitious and costly new programs for energy, education and health care.

Largest budget proposal in U.S. history would reform tax policies."I don't think that we can continue on our current course," Obama said in his remarks about the budget submitted to Congress this morning. "I work for the American people, and I'm determined to bring the change that the people voted for last November. And that means cutting what we don't need, to pay for what we do."

The president says the budget proposal, entitled "A New Era of Responsibility: Renewing America's Promise," marks a departure from the past and makes tough choices about how to spend taxpayer money.

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WATCH: A Whopping Big Budget http://www.abcnews.go.com/Video/playerIndex?id=6966676

"We need to be honest with ourselves about what costs are being racked up, because that's how we'll come to grips with the hard choices that lie ahead," he said.

Obama's change begins with new priorities as outlined in his 2010 budget proposal, including $770 billion in tax cuts during the next 10 years for the middle-class, $150 billion for alternative energy sources and $634 billion for a health care reserve fund to pay for health care reform.

Much of the spending is being done with money the government does not have, creating a $1.75 trillion deficit next year alone.

"The president's beginning to make President Bush look like a piker when it comes to spending," House Minority Leader Rep. John Boehner of Ohio said.

Almost $1 trillion of the spending, $989 billion, comes from new taxes during the next 10 years. When the Bush administration's tax cuts expire at the end of 2010, new tax increases will target families earning more than $250,000 a year.

Obama's proposal will generate $636 billion in new taxes, $338 billion from allowing the Bush income tax cuts to expire, but also by increasing the capital gains tax and lowering the deduction for charitable giving.

Peter Orszag, director of the Office of Management and Budget, defended the reduction, saying that the stimulus provides $100 million for charities and that a tax hike on charitable giving will not discourage wealthy Americans from giving donations.

"The recovery itself will provide a strong boost not only to charities, but to the overall economy and to the people who contribute to charities," he said today.

Obama will also push an additional $353 billion in new tax hikes on businesses.

"The president … believes that the changes that this budget would require in the tax code are good for the American people," White House Press Secretary Robert Gibbs said. "The president doesn't believe that the changes that are being made would hinder economic growth."

On Capitol Hill, Obama's former commerce secretary nominee, Sen. Judd Gregg, R-N.H., disagreed.

"So, if you've got a restaurant or you have a small business and you're getting hit now with a tax rate that's going to jump from 35 percent up to 41 percent. Well, where do you, where do you pay for that? You lay people off," he said.

The budget released today was an overview of the more detailed document to be released in April. The president has said that when the full budget is developed, the administration will carefully and critically review it, line by line, to eliminate inefficiency.

"A budget is more than simply numbers on a page," Obama said. "It is a measure of how well we are living up to our obligations to ourselves and one another. It is a test for our commitment to making America what it was always meant to be: a place where all things are possible for all people. That is a commitment we are making in this, my first budget, and it is a commitment I will work every day to uphold in the months and years ahead."

http://www.abcnews.go.com/Politics/stor ... 591&page=1

We are already going down the toilet and obama is hitting the flush handle again.