Obama’s Budget Forecasts $1.3 Trillion Deficit

Feb 10, 2012 7:39pm

President Obama’s 2013 budget, which will land with a thud on Congress’ doorstep Monday, shows the price the country continues to pay for the recession, projecting a deficit of $1.3 trillion for 2012, the White House said Friday.

Under the administration’s tax and spending proposals, the deficit would fall to $901 billion next year.

The budget largely echoes the domestic proposals that the president has been pushing for the last year, including spending for job creation and tax increases for the wealthy.

The president’s tax reform proposal would raise $1.5 trillion over the next decade, largely from eliminating the Bush-era tax cuts for the upper-income brackets. Obama will also continue to call for a “Buffett rule,” which would require millionaires to pay at least 30 percent of their income in taxes.

To further reduce the deficit, the president will propose $360 billion in cuts to Medicare and Medicaid and call for $278 billion in savings from non-health benefits programs such as agriculture subsidies and federal civilian worker pensions.

In terms of spending, the budget will include $350 billion for short-term job creation programs and $475 billion in infrastructure projects.

The election-year budget, however, is likely to gather dust on a Capitol Hill shelf. According to the White House, the budget will contain many items from a September proposal to the failed congressional deficit “super-committee,” which disagreed over tax increases and cuts to entitlement programs.

The president will unveil his budget in person in a speech Monday at Northern Virginia Community College.

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