Estimates confirm Obama's problem
Source: Agencies |
January 27, 2010, Wednesday
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THE latest congressional budget estimates due today predict a US$1.35 trillion United States deficit for this year, a top legislative aide says.
The Congressional Budget Office figures confirm the massive problem facing President Barack Obama and his Democratic allies just days before his February 1 budget submission. The White House says Obama will propose a three-year freeze on domestic agency budgets, though the savings would barely make a dent.
The White House is under considerable pressure to cut deficits - the red ink hit a record US$1.4 trillion last year - or at least keep them from growing. Encouraged by last week's Massachusetts Senate victory, Republicans are hitting hard on the issue.
The budget office said the deficit would slide to US$480 billion by 2015, the CBO says, but only if tax cuts on income, investments and large estates are allowed to expire at the end of this year. Most budget experts see deficits as far higher once tax cuts and other policies are factored in.
The 2010 deficit figure is in line with previous estimates and would be a slight decline from last year's shortfall. But plans afoot on Capitol Hill for a new jobs bill and a coming Obama request for war funds would add to the total.
The figures arrived just hours before the Senate was likely to reject a White House-backed plan to establish a bipartisan task force to recommend steps to curb the deficit.
The spending freeze, expected to be proposed by Obama during the State of the Union address to Congress tomorrow, would apply to a relatively small portion of the federal budget, affecting a US$477 billion pot of money available for domestic agencies whose budgets are approved by Congress each year.
Some of those agencies could get increases, others would have to face cuts; such programs got an almost 10-percent increase this year. The federal budget total was US$3.5 trillion.
The freeze on so-called discretionary programs would have only a modest impact on a deficit expected to match last year's US$1.4 trillion. The steps needed to really tackle the deficit include tax increases and curbs on benefit programs such as Medicare, Medicaid and Social Security.
That is the idea driving the Obama-backed plan to create a special task force to come up with a plan to curb the spiraling budget deficit. But the Senate sponsors of the plan say it has attracted too much opposition from the right and left to prevail.
Republicans say the panel would lead to big tax hikes. Democratic opponents say they don't want to vote on proposals to cut benefit programs like Social Security without being able to shape the plan.
Obama's three-year spending freeze will be part of the budget Obama will submit on February 1, senior administration officials said.
The Pentagon, veterans programs, foreign aid and the Homeland Security Department would be exempt from the freeze.
The Congressional Budget Office figures confirm the massive problem facing President Barack Obama and his Democratic allies just days before his February 1 budget submission. The White House says Obama will propose a three-year freeze on domestic agency budgets, though the savings would barely make a dent.
The White House is under considerable pressure to cut deficits - the red ink hit a record US$1.4 trillion last year - or at least keep them from growing. Encouraged by last week's Massachusetts Senate victory, Republicans are hitting hard on the issue.
The budget office said the deficit would slide to US$480 billion by 2015, the CBO says, but only if tax cuts on income, investments and large estates are allowed to expire at the end of this year. Most budget experts see deficits as far higher once tax cuts and other policies are factored in.
The 2010 deficit figure is in line with previous estimates and would be a slight decline from last year's shortfall. But plans afoot on Capitol Hill for a new jobs bill and a coming Obama request for war funds would add to the total.
The figures arrived just hours before the Senate was likely to reject a White House-backed plan to establish a bipartisan task force to recommend steps to curb the deficit.
The spending freeze, expected to be proposed by Obama during the State of the Union address to Congress tomorrow, would apply to a relatively small portion of the federal budget, affecting a US$477 billion pot of money available for domestic agencies whose budgets are approved by Congress each year.
Some of those agencies could get increases, others would have to face cuts; such programs got an almost 10-percent increase this year. The federal budget total was US$3.5 trillion.
The freeze on so-called discretionary programs would have only a modest impact on a deficit expected to match last year's US$1.4 trillion. The steps needed to really tackle the deficit include tax increases and curbs on benefit programs such as Medicare, Medicaid and Social Security.
That is the idea driving the Obama-backed plan to create a special task force to come up with a plan to curb the spiraling budget deficit. But the Senate sponsors of the plan say it has attracted too much opposition from the right and left to prevail.
Republicans say the panel would lead to big tax hikes. Democratic opponents say they don't want to vote on proposals to cut benefit programs like Social Security without being able to shape the plan.
Obama's three-year spending freeze will be part of the budget Obama will submit on February 1, senior administration officials said.
The Pentagon, veterans programs, foreign aid and the Homeland Security Department would be exempt from the freeze.
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