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| President's budget: $3.8 trillion, w/ a prison |
| By Mark Silva, The Swamp |
| Published: 02/01/2010 |
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Plan includes $270 million for federalization of Thomson prison in Illinois; President Barack Obama today will propose a new, $3.8 trillion federal budget that boosts spending in some areas, such as education and job-creation, but cuts spending elsewhere. It also envisions higher taxes for Americans earning more than $250,000 a year. The White House's budgetary blueprint for fiscal 2011, which starts in October, also includes $270 million to purchase and upgrade the Thomson Correctional Center in Northwest Illinois, according to the Office of Management and Budget. The Obama administration hopes to incarcerate some of the suspected terrorists housed at the U.S.-military run prison at Guantanamo Bay, Cuba, at Thomson. The overall proposed budget of $3.834 trillion is 3 percent bigger than what the government is spending this year, according to the OMB. It includes a freeze on the overall level of "discretionary spending'' apart from national security spending and the mandatory entitlement spending for Social Security, Medicare and Medicaid. Within the discretionary part of the budget, which represents a small share of the overall pie, the White House proposes increases in some spending - with $3 billion more for primary and secondary education and $17 billion for college Pell Grants, for instance - and cuts in other areas, such as an elimination of oil and gas subsidies. "It's not a left wing budget. It's not a right wing budget,'' Dan Pfeiffer, White House communications director, said in a briefing for reporters Sunday. "It's a pragmatic budget. It's a common-sense budget.'' Yet it is certain to create some controversy in Congress, which ultimately will determine how the government raises revenue and spends money during the 2011 budget year that starts Oct. 1. For instance, the White House's budget includes an expiration of the 2001 and 2003 tax cuts which the Bush administration won, though only for people making more than $250,000 a year. The Obama administration hopes to help pay for its plans for a health-care overhaul with an elimination of the Bush tax cuts, which are set to expire in 2011, though only for higher-income Americans. The White House plan also envisions a somewhat smaller federal deficit in 2011 -- $1.267 trillion - than this year's projected budget deficit of $1.35 trillion. By 2015, the White House budget office forecasts, the deficit, running at 8.5 percent of the Gross Domestic Product this year, can be cut to less than 4 percent of GDP by 2015. The gradual scaling back of the deficit is necessary to avert another recession, according to OMB Director Peter Orszag. "When (Obama) came to office we had a jobs crisis, a housing crisis, a fiscal crisis,'' Pfeiffer said. "We are making progress. We also recognize that over the medium and long term we have to deal with the fiscal crisis. This budget recognizes that.'' The overall freeze on discretionary spending also will draw its share of criticism. The White House proposes a three-year freeze on this portion of the budget - spending apart from Social Security, Medicare, Medicaid, service on the national debt and other mandatory areas of spending. The White House also is boosting spending for defense and homeland security, including air-traffic safety. Within the discretionary part of the budget, which accounts for about one-eighth of the overall plan, "there are some areas that go up, some that go down -- there is an overall cap,'' Pfeiffer said. "This is to draw a line in the sand, to enforce some discipline.'' The budget "makes tough choices,'' Pfeiffer maintains, while investing in initiatives to create jobs. The budget includes about $100 billion in tax incentives to spur investment in small business and encourage small businesses to create more jobs. "That freeze is not an across-the-board freeze,'' Orszag noted in the briefing for reporters on Sunday. "So, for example, we have a $3 billion increase, expansion, of funding for education.... We also expand research and development funding... by 6 percent. "Even within an overall cap, we are trying to redirect'' money to important areas, Orszag said. The elimination of the 2001 and 2003 Bush tax cuts for people making more than $250,000 a year can generate another $678 billion over the coming decade, according to Orszag. And with that, the OMB director says, the deficit can be cut from more than 10 percent of the overall economy in 2010 to less than 4 percent by 2015. Beyond that, he says, it will require further work - and the president is creating a budget commission to start on that. "What we attempted to achieve is a fairly smooth glide path reducing the deficit,'' Orszag said. "It's also one of the reasons we have been focused on health-care,'' he said. "It will not be possible to restore long-term fiscal balance to the government without getting control over... health-care costs.'' Among the cuts which the administration proposes are the elimination of the Constellation Program at NASA, which was to include planning for a return mission to the Moon. And among the spending increases: $270 million to purchase and upgrade the Thomson Correctional Center from the state of Illinois. The administration hopes to house detainees from Guantanamo there, as part of its effort to close the controversial camp in Cuba. But the purchase of Thomson "would be warranted in any case to house maximum security prisoners,'' according to Orszag. The federal Bureau of Prisons will require additional space, he said. According to the White House, the $3.834 trillion spending plan includes: A projected deficit of $1.267 trillion, 8.3 percent of GDP. That is down from $1.56 trillion in 2010, or 10.6 percent of GDP. $100 billion for jo-creating investments in small business tax cuts, infrastructure, and clean energy. This includes a new Small Business Jobs and Wages Tax Cut to spur small business hiring and wage increases, at a cost of $33 billion. Extension for another year of the "Making Work Pay Tax Credit'' for 110 million American families, which amounts to $800 a year for a married couple filing taxes jointly. Elimination of the tax on capital gains for new investments in small businesses. More than 120 cuts totaling $20 billion to enable other areas of discretionary spending to increase within the overall freeze. Elimination of tax preferences for oil, gas, and coal companies - raising $40 billion over 10 years. Allowing the 2001 and 2003 tax cuts to expire for households making more than $250,000 a year. A $3 billion increase in the Elementary and Secondary Education Act for public school funding, raising the total to $28 billion, plus $1.35 billion more for the "Race to the Top'' program for schools to increase student performance, in addition to $4.35 billion that was included for the program in the economic stimulus act. $17 billion for Pell Grant funding for college aid. $33 billion for a 2010 supplemental request and $159.3 billion for 2011 to support the ongoing war effort in Afghanistan and Iraq and other defense needs. A 2 percent increase for the Department of Homeland Security, for a total of $43.6 billion, including $734 million for up to 1,000 new Advanced Imaging Technology screening machines at airport checkpoints and new explosive detection equipment for baggage screening and funding for emore federal air marshals on international flights. Read More. |
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