President Obama on Thursday presented a budget that he said is an "honest accounting of where we are and where we intend to go."
Congress received a 140-page summary of the budget for fiscal year 2010 Thursday morning. The full details are expected in April. The government’s fiscal year runs from October of one year to September of the next. In introducing the budget, Obama slammed what he called a “dishonest accounting” of the costs of U.S. wars, and reiterated his commitment to make government “more open and transparent.” “For too long, our budget has not told the whole truth about how precious tax dollars are spent,” he said. “Large sums have been left off the books, including the true cost of fighting in Iraq and Afghanistan. And that kind of dishonest accounting is not how you run your family budgets at home; it’s not how your government should run its budgets either.” Read the budget (pdf) The president’s budget includes investments in renewable energy, education, and health care — priorities Obama outlined during his address to a joint session of Congress on Tuesday. Watch: What’s in the budget for you ยป Despite an ambitious agenda that requires “significant resources,” Obama aims to halve the $1.3 trillion deficit by 2013. Peter Orszag, director of the Office of Management and Budget, on Thursday outlined four ways the administration will reach that goal.
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First, he predicted the economy would recover because of the Recovery Act and the normal business cycle. Second, Orszag said the tax cuts for the wealthy will expire as scheduled at the end of 2010. That will hit families making more than $250,000 a year. The administration is also closing down some corporate tax loopholes. Orszag also said the administration is “winding down the war,” which he predicted would reduce costs over time. Finally, the administration is “making government more efficient,” Orszag said. The president says his team has already identified $2 trillion in budget savings by scouring the federal budget. Here’s a breakdown of some of the items in the budget. Defense $75.5 billion in spending on Iraq and Afghanistan for the remainder of 2009. $130 billion in spending on Iraq and Afghanistan for fiscal year 2010. $533.7 billion for Department of Defense, an increase of $20.4 billion (4 percent) over 2009. The budget also supports an increase in Army permanent forces to 547,000 and in Marine Corps forces to 202,000 by the end of 2009. The Marine Corps said last week that it has already reached that goal. CNN obtained a list of some of the proposed cuts before the budget was released. The list suggests expensive weapons systems will be cut but does not specify which programs or how much money will be saved. White House officials said they are letting Defense Secretary Robert Gates take the lead on specific announcements Thursday. The list did contend the Pentagon’s new weapons programs are “among the largest, most expensive, and technically difficult that the department has ever tried to develop. Consequently, they carry a high risk of performance failure, cost increases and schedule delays.” Education $46.7 billion in spending for fiscal year 2010. $0.5 billion spending increase from fiscal year 2009 to 2010. The stimulus package passed earlier this month contains another $81.1 billion for education. The budget also establishes a new five-year $2.5 billion program to help low-income students attend college and “increases funding for the charter school program to support the expansion of successful charter school models, while increasing state oversight to monitor and shut down low-performing charter schools.” Energy $26.3 billion in projected spending for the Energy Department in fiscal year 2010. The Energy Department received another $38.7 billion in the stimulus package The budget “builds on the $11 billion provided in the [stimulus package] for smart grid technologies, transmission system expansion and upgrades, and other investments to modernize and enhance the electric transmission infrastructure.” It “supports and encourages the early commercial development of innovative, clean energy technologies through loan guarantees,” according to the document. It also supports so-called “clean coal.” The document states that the “budget supports carbon capture and storage technology, and along with the $3.4 billion provided in the Recovery Act for low-carbon emission coal power and industrial projects … will help allow the use of our extensive domestic coal resource while reducing the impacts on climate change.” The budget cuts funding for the controversial Yucca Mountain nuclear waste storage program. Funding for the program will be scaled back while the administration works on a new strategy for nuclear waste disposal, the document says. Obama warned Thursday that there will be “some hard choices that lie ahead.” Some of the other proposed spending cuts range from outdated farm subsidy programs to pricey Pentagon weapons programs and the so-called “carried-interest” loophole on Wall Street. Each program, however, has political patrons on Capitol Hill who will fight to save the budget items, setting the stage for major political battles as the details of the budget are debated in the months ahead. The Obama administration is aiming to save $9.8 billion in agricultural costs over 10 years by phasing out direct payments to farmers with sales revenues of $500,000 or more per year. The list claims that “about 25 percent of direct payments go to farmers with farm sales (revenue) of greater than $500,000.” Obama is also proposing a $634 billion health care “reserve fund” aimed at reforming the system. In order to fund it, Obama will ask wealthy Americans to accept with a tax increase and wealthy seniors to pay higher Medicare premiums. The reserve fund will be used only for reforming the system by cutting costs and trying to deal with the 46 million Americans without health insurance. Rep. John Boehner, the House minority leader, questioned Obama’s proposal to fund health care.
“Everyone agrees that all Americans deserve access to affordable health care, but is increasing taxes during an economic recession, especially on small businesses, the right way to accomplish that goal” he asked. The budget will leave the details of how to reform the system to be worked out by Congress, and top Obama officials are already acknowledging this is only a start — it will take more money to get the job done.
