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Obama budget: Record spending, record deficit

Left: Senate staff Sam Armocido, piles copies of President Barack Obama's budget delivered to the Senate Budget Committee on Capitol Hill in Washington, Monday, Feb. 1, 2010.
Right: Copies of President Barack Obama's budget are delivered to the Senate Budget Committee on Capitol Hill in Washington, Monday, Feb. 1, 2010.

Graphic tracks revenue and spending in the fiscal 2011 budget proposal

Spelling out painful priorities, President Barack Obama urged Congress on Monday to quickly approve a huge new shot of spending for recession relief and job creation, part of a record $3.8 trillion budget that would boost the deficit beyond any in the nation's history while only slowly beginning to put Americans back to work.

If Congress goes along with Obama's election-year plan, the nation would still end the year with unemployment pushing double digits at 9.8 percent and this year's pool of government red ink deepening to $1.56 trillion -- by the administration's accounting.

The spending blueprint for next year calls for tax cuts for workers and business and more aid for cash-starved state governments as well as the unemployed. The jobs initiative largely mirrors last year's stimulus bill, but is about one-third its size. The president is asking for nearly $300 billion for recession relief and job stimulus.

The budget paints a remarkably dire picture of a federal government that will have to borrow one-third of what it spends next year as it runs a deficit that still would total some $1.3 trillion.

At the same time, Obama is acutely aware that persistent joblessness is the issue most likely to spell political trouble for Democrats in this year's midterm elections -- and perhaps for his own re-election chances in 2012.

The president's budget plan sees the deficit coming down by nearly $300 billion next year, and he's offering more than $1 trillion in deficit reduction proposals over the coming decade. (Emphasis added)

While proposing increases for immediate needs, he urged lawmakers to follow his lead and make cuts, even painful ones in programs dear to them. "I'm asking Republicans and Democrats alike to take a fresh look at programs they've supported in the past to see what's working and what's not, and trim back accordingly," he said.

"What I reject is the same old grandstanding when the cameras are on, and the same irresponsible budget policies when the cameras are off," the president said. "It's time to save what we can, spend what we must, and live within our means once again."

Republicans weren't impressed with the proposals.

"They're not willing to do big ideas. They're doing ideas that create perception but don't do anything big," said New Hampshire Sen. Judd Gregg, senior Republican on the Budget Committee. "The spending freeze for example. You're talking what, $10 billion on a $1.6 trillion deficit?"

Democrats, facing the prospect of major losses in November, are likely to join Republicans in balking at many of Obama's proposals. Moderate Democrats already are wary of another debt-financed economic stimulus program and may also choke on many of the recommended tax increases and spending cuts.

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Obama would extend most of former President George W. Bush's tax cuts, as they apply to middle-income earners. Married couples making more than $250,000 and individuals making more than $200,000 would see their marginal tax rates rise to as much as 39.6 percent and also lose some of the benefits they take on itemized deductions like charitable gifts and mortgage interest. (Emphasis added)

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