Today President Barack Obama and his administration have predicted a deficit of $1.75 trillion in a budget proposal for 2009. This is the legacy of President Bush, a $1,075,000,000 deficit. This gaping hole in the treasury is huge! This deficit represents 12.3% of U.S. GDP (gross domestic product), and is the largest percentage share of GDP since the end of World War II.
The President's budget sets some major goals such as overhauling the healthcare system and shoring up the U.S. economy.
Now senior Obama administration officials are suggesting that the President's expensive policy goals will be offset by cuts in spending on existing programs that are no longer necessary or have proven wasteful. The Obama administration is promising to put the country in better fiscal shape.
This is going to be difficult to near impossible as federal spending is skyrocketing as Obama officials try to jolt the faltering economy with public-works spending and tax cuts and continue to bail out the troubled financial industry. Still President Obama has made a bold pledge to halve the more-than $1 trillion deficit he inherited from former Republican President George W. Bush in four years.
To do this Obama is producing tax increases on wealthier Americans and reduce the cost of the Iraq war as a troop drawdown, to curb the deficit. Currently the budget projects costs of fighting in Iraq and Afghanistan as totaling just over $140 billion this year and $130 billion in the 2010 fiscal year. Obama's budget proposes that annual costs will drop after the drawdown to $50 billion annually. The proposed budget would also phase out government payments to crop producers making more than $500,000 -- saving $9.8 billion over 10 years -- and eliminate subsidies for cotton storage, saving an additional $570 million over the same period.