Sunday, February 22, 2009

Obama's Budget Makes Room for Disaster a Year

Obama's budget will include money for a major disaster a year:
Politico: 'This budget actually is going to assume that there will be a hurricane, tornado, earthquake, flood or manmade disaster in the United States in fiscal year 2010, and each year going forward 10 years,' a senior administration official said. Under White House projections, this year's inherited budget deficit of $1.3 trillion will be cut to $533 billion by fiscal year 2013, the end of the first term. The official said the bulk of the savings come from winding down the war in Iraq, additional revenue from raising taxes on the wealthy, and other cuts and savings to be specified later. Officials have said the budget creates room to start an ambitious overhaul of the nation's health-care system, which Obama aides view as a key to the government's fiscal future. The budget provides a projected cost of the wars in Iraq and Afghanistan ('overseas military contingencies'), assumes the full cost of fixing the alternative minimum tax each year and does not assume deep cuts in Medicare physician payments. 
Some on the left are balking that Obama is trying to reduce the deficit. I don't understand that complaint. It's the prudent thing to do. Why wouldn't he want to at least try? It's been proven in the past that there's plenty of waste to clean up.
Politico: Obama’s team has settled on a three-part plan to deliver the bad news to America, aides and experts say. First, they will begin the week with a “fiscal summit” Monday designed to stress that the president cares about the deficit and plans to reduce it, by raising taxes on the wealthy, drawing down in Iraq and reining in Medicare and other entitlement costs.

Second, the president will explain the widening gap in an address to Congress Tuesday in positive, hopeful terms. He’ll say a brief bulge in government spending is needed to stimulate the economy, and to reform health care, education, and energy policy – key campaign promises that he’ll flesh out as he releases his first budget outline on Thursday.

And third, the current White House will take advantage of a ripe but waning opportunity: to blame it all on President George W. Bush.
Tax hikes for the wealthy coming:
WaPo:Obama also seeks to increase tax collections, mainly by making good on his promise to eliminate some of the temporary tax cuts enacted in 2001 and 2003. While the budget would keep the breaks that benefit middle-income families, it would eliminate them for wealthy taxpayers, defined as families earning more than $250,000 a year. Those tax breaks would be permitted to expire on schedule in 2011. That means the top tax rate would rise from 35 percent to 39.6 percent, the tax on capital gains would jump to 20 percent from 15 percent for wealthy filers and the tax on estates worth more than $3.5 million would be maintained at the current rate of 45 percent.