Spring Break
Obama plan forsees record $1.75 trillion deficit
Martin Crutsinger The Associated Press
Issue date: 2/27/09 Section: News
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In addition to sending Congress his $3.55 trillion budget plan for 2010, Obama proposed more immediate changes that would push spending to $3.94 trillion in the current year. That would result in a record deficit Obama projects will hit $1.75 trillion, reflecting the massive spending being undertaken to battle a severe recession and the worst financial crisis in seven decades.
As part of the effort to end the crisis, the administration proposes boosting the deficit by an additional $250 billion this year, enough to support as much as $750 billion in increased spending under the government's rescue program for banks and other financial institutions. That would more than double the $700 billion bank bailout passed by Congress last October.
In his budget message, Obama sought to draw a clear distinction with the Bush administration, saying "the time has come to usher in a new era - a new era of responsibility" both in government and the private sector.
But Republicans contended Obama was avoiding hard choices in favor of exploding the deficit and raising taxes.
"This budget plan is once again a missed opportunity for American taxpayers - it raises taxes on all Americans, implements massive new spending and fails to make any tough choices to control the deficit," said Sen. Judd Gregg, R-N.H., the top Budget Committee Republican who was nominated by Obama to join his Cabinet as commerce secretary but then withdrew.
The administration called the request for additional bailout resources a "placeholder" in advance of a determination by the Treasury Department of what will actually be needed.
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