Obama Budget Predicts $1.3T Deficit For 2012

By: AP
By: AP

The White House on Friday confirmed a report that President Barack Obama's new budget predicts a $1.3 trillion deficit for the ongoing fiscal year. The deficit would drop to $901 billion next year under the administration's tax and spending policies.

In his budget submission on Monday the president will also repeat his call to raise the top income tax rate for individuals making more than $200,000 a year and families earning $250,000 from 35 percent to 39.6 percent as part of $1.5 trillion in tax hikes over the coming decade.

The election-year document is sure to get a brushoff from Republicans controlling the House. The White House says that Monday's budget will contain many items from a September submission to a failed congressional deficit "supercommittee," which deadlocked over tax increases and how much to cut popular benefit programs like Medicare.

The Obama budget will also reflect tight "caps" on agency operating budgets forged in last summer's budget and debt limit pact between Obama and House Speaker John Boehner. Those include a $6 billion cut in the budget for core Pentagon operations and cuts to many domestic agencies as well.

But it's commonly assumed that presidential politics will prevent Democrats and Republicans from renewing efforts for a broader budget agreement, though negotiations on Capitol Hill are ongoing in efforts to renew jobless benefits for the long-term unemployed and a two percentage point cut in payroll taxes and prevent a 27 percent cut in Medicare payments to doctors that's the product of an outdated funding formula.

The figures were first reported in The Wall St. Journal, which viewed leaked draft budget documents.

The Journal also says the president will propose a six-year, $476 billion highway and surface transportation bill and $360 billion from curbs to federal health care programs like Medicare and Medicaid.

The White House warned earlier this week that its economic assumptions -- predictions of the unemployment rate averaging 8.9 percent this year -- now look too pessimistic. They were made in mid-November, before a recent spate of positive news about the economy. If the economy performs better than officially projected, it'll mean a better fiscal performance for the government since greater growth means increased tax revenues.

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  • by Bron on Feb 14, 2012 at 05:06 AM
    It's a pretend budget from a pretend president.
  • by Common Sense Location: C/S on Feb 13, 2012 at 05:37 AM
    So much for his promise of cutting the deficit in half during his first term...
  • by LedHed Location: Colorado Springs on Feb 10, 2012 at 01:33 PM
    Further proof that B.O. will spend whatever it takes to promote his initiatives and agendas, no matter how detrimental the results may be. Typical liberal trait of throwing money at issues, instead of adressing them outright. And don't bemoan previous administrations; this one has spent astronomically more than they did (any of them), yet has far less "bang for the buck" to show for it. Facts are facts, and those of you who will dispute this are myopic at best, and deluded (intentionally?), at worst.
  • by Nath Location: Colo Spgs on Feb 10, 2012 at 01:01 PM
    Strange there should be the mention of a budget. The government has not had a new one (passed in Congress) in more than a thousand days. It has been operating on a string of continuing resolutions all of this time. This may be the first time in our history were an entire presidential term will pass by where the government went 4 years operating on an old budget from a prior administration. All new program's funding and spending since January 2009 has been included in the bills passed since then and seperate from the continuing budget. If we were told what the total deficit was, including off budget spending, it would probably be two or three times the $1.3 trillion figure.
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