There’s been a lot of talk lately about Reagan turning 100 if he were alive. Remember…he was the first to start driving up the national deficit. It was Clinton who got it back under control, only to be skyrocketed by Bush. Obama is laying out a plan to halve the U.S. deficit by 2013 and axe $1.1 trillion over a decade through spending cuts and tax increases.
Obama said his plan was a balance between deficit reduction pain and investment for growth. It only provided a general guide on how to tackle entitlement outlays that include the Social Security and Medicare programs responsible for huge government spending.
The budget calls for investments in areas such as high-speed rail, broadband Internet, and energy efficiency research. It makes cuts to programs that provide heating help for poor people and grants to big airports, for example.
Obama’s $3.729 trillion budget proposal for fiscal 2012 shows the deficit rising to a record $1.645 trillion in fiscal 2011, then falling sharply to $1.101 trillion in 2012.
This trend would trim the deficit as a share of the U.S. economy to 3.2 percent by 2015 from 10.9 percent this year and meet a pledge Obama made to his Group of 20 partners to halve the deficit by 2013 compared to its size when he entered the White House in January, 2009.
Two-thirds of the $1.1 trillion in savings come from spending cuts. The rest comes from higher revenues as U.S. growth steadily picks up pace and from tax increases. The president is seeking an additional $328 billion through a variety of measures, including ending tax breaks for big business on income earned abroad.
Obama plans to freeze non-security discretionary spending for five years, lowering the deficit by $400 billion over 10 years and saving $33 billion in fiscal 2012.