By Arun Kumar, IANS,
Washington: President Obama Monday proposed to boost funding for wars in Afghanistan and Iraq while trimming domestic spending in a record $3.8 trillion budget for 2011 with a projected $1.267-trillion deficit.
Though smaller than this year’s projected $1.56 trillion deficit, the budget is third in a row with a deficit of more than $1 trillion.
While putting almost $30 billion more into the wars in Afghanistan and Iraq, the federal budget also includes a $100-billion jobs package, more education spending and higher taxes on families earning more than $250,000 a year.
In what is seen as an attempt to balance two competing goals – continued government spending to boost the fragile economic recovery and controlling the nation’s deficit – the budget proposes a three-year freeze on some domestic spending.
The budget calls for $53 billion in tax cuts, including small-business tax cuts, as well as new investments in green technology and infrastructure programmes for work on roads and bridges.
“The employment market remains weak,” White House budget chief Peter Orszag was cited as saying by CNN. “In that context, the budget focuses on job creation and middle class stability.”
The US Congress, which holds the purse strings, will begin a series of hearings starting Tuesday with White House Cabinet officials briefing lawmakers about the president’s budget proposals.
If Congress passes the budget, the deficit in 2011 would reach 8.3 percent of the US gross domestic product – down from a high this year of 10.6 percent. By 2014, it would drop to 3.9 percent.
The long-term goal is for the deficit to reach 3 percent of the GDP, which many economists consider sustainable, CNN said. But reaching that goals depends on the establishment of a bipartisan fiscal commission that Obama would create by executive order.
(Arun Kumar can be contacted at [email protected])