From The Financial Times:
Obama forecasts $1,750bn deficit
By Andrew Ward and Edward Luce in Washington
Published: February 26 2009 11:24 | Last updated: February 27 2009 09:56
President Barack Obama on Thursday unveiled the most expansive blueprint for federal government involvement in the US economy in more than a generation in a ten-year budget outline that showed this year’s deficit quadrupling to $1,750bn.
The document, which lays out ambitious plans to create universal health insurance and adopt an economy-wide carbon permit trading system by 2012, was heavily panned by Republicans.
The budget would see George W. Bush’s tax cuts for the wealthiest expire by 2011 and introduce new tax increases on families earning $250,000 or more to pay for healthcare expansion.
In a sign of intense partisan battles to come, Mitch McConnell, the Republican leader in the Senate, where the US president needs supermajorities of at least 60 votes to push bills through, said: “Unfortunately, at this juncture, while the American people are tightening their belts, Washington seems to be taking its belt off.”
The budget also allowed for about $750bn for “financial stabilisation efforts”, on top of the $700bn already granted to Wall Street. The potential aid was shown as a net cost of $250bn because the government would anticipate recouping some of the money. Peter Orszag, White House budget director, said there were “no plans” to seek more aid for banks but the measure indicated it was a strong possibility.
The 134-page document outlines a legacy inherited from Mr Bush of what it calls “mismanagement and missed opportunities and of deep, structural problems ignored for too long”.