Barrack Obama: Bringing change we can all pay for.

So, Barrack has announced that he will be releasing a "stimulus package" for almost 1 Trillion Dollars- at the same time he says that his plan will be able to cut the "deficit" in half by the end of his first term. So- he is going to add about a Trillion Dollars to the deficit and then somehow cut the deficit in half. There are only two ways to decrease a deficit- Either you decrease spending and let the tax dollar surplus pay the down the difference, or you increase taxes to pay down the difference. Since we are increasing the total budget- there is no other way than to increase taxes if the deficit truly will be paid down within 4 years.

So, we are in the worst economic crisis in 70 years. I can't believe that our plan is to increase taxes on the American people. How will that help increase consumer spending and stimulate commerce? People will have fewer dollars in the bank and so the banks will not be able to lend! Anyway... the article below is great. Take the time to read it. We really need to understand the dollar figures that we are dealing with in the upcoming changes.




WASHINGTON - President Barack Obama unveiled a multi-trillion-dollar spending plan Thursday that would boost taxes on the wealthy, curtail Medicare, lay the groundwork for universal health care and leave a string of deficits dwarfing any in the nation's history. In addition to sending Congress his $3.55 trillion budget plan for 2010, Obama proposed more immediate changes that would push spending to $3.94 trillion in the current year. That would result in a record deficit the president projects will hit $1.75 trillion, reflecting the massive spending being undertaken to battle a severe recession and the worst financial crisis in seven decades. The new deficit total is roughly equivalent to $12,000 for every taxpayer in the United States, or approximately $6,000 for every man, woman and child in America. The new budget also plans for additional financial bailouts of up to $750 billion, a senior administration official told NBC News. But the White House believes that as the economy improves it will get roughly $500 billion back, so the expected cost to taxpayers is $250 billion. Obama, in a morning briefing, spoke of "hard choices that lie ahead." He called his budget "an honest accounting of where we are and where we intend to go." GOP assails plan
But Republicans contended Obama was avoiding hard choices in favor of exploding the deficit and raising taxes. "The American people deserve a budget that puts fiscal discipline and jobs first. The budget offered by the Obama administration fails on both counts," said Rep. Mike Pence, the chairman of the House Republican Conference. The spending blueprint Obama sent Congress was a 134-page outline with further details to come in mid to late April, when the new administration sends up the massive budget books that will flesh out the plan. The plan balances efforts to fulfill Obama's campaign pledges to deliver tax cuts to the middle class, expand health care coverage and combat the economic crisis with an effort to keep a soaring deficit from becoming a permanent drag on the economy. However, Republicans assailed the budget for the tax increases, and some Democrats worried that Obama was not doing enough to get the deficit under control. getCSS("3088867")[Photo]

"I would give him good marks as a beginning, but we have to do a lot more to take on this long-term debt buildup," said Senate Budget Committee Chairman Kent Conrad, D-N.D. "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?" asked House Minority Leader John Boehner, R-Ohio. In a written statement, Sen. Judd Gregg, the ranking Republican on the Senate Budget Committee, called the administration's budget outline "a half-hearted attempt" to reduce the deficits and "missed opportunity" to take the country in a fiscally sound direction. Judd, Obama’s former nominee to lead the Department of Commerce, also complained the budget “…raises taxes on all Americans, implements massive new spending, and fails to make any tough choices to control the deficit and long-term fiscal crisis posed by the huge entitlement programs."
The $634 billion down payment on expanding health care coverage would come from a $318 billion increase over 10 years in taxes on the wealthy, defined as couples making more than $250,000 per year and individuals making more than $200,000. The other half of the money for expanding health care — $318 billion — would come from curtailing payments to hospitals and insurance companies under Medicare and drug payments under Medicaid.
The cost of the stimulus bill and the increased bailout support would push the deficit for this year to $1.75 trillion, nearly four times last year's record $455 billion and a percentage of the economy — just over 12 percent — not seen since World War II. The deficit would remain near $1 trillion over the next two years before dropping to $581 billion in 2012 and $533 billion in 2013, the year that Obama has pledged to cut the deficit he inherited in half. However, to meet that goal, the administration's budget depends on optimistic projections that the economy, currently in the longest recession in a quarter-century, will come roaring back with economic growth of 3.2 percent next year and 4 percent-plus rates in the following three years, significantly higher than private economists are forecasting. Christina Romer, head of the president's Council of Economic Advisers, defended the administration forecast, telling reporters at a briefing that the private forecasters may not be taking into account all of the efforts the government is employing to jump-start the economy.
She said in past downturns, the more severe the recession, the stronger the recovery from the slump. Obama's budget projects $2 trillion in deficit reduction over a decade — split between tax hikes on wealthier Americans and trimming a variety of government programs ranging from subsidies paid to wealthy farmers to eliminating ineffective government programs. However, previous presidents have also sought to target wasteful government spending only to find the programs targeted had powerful supporters in Congress. Obama's blueprint awards domestic agencies budget increases, on average, of 7 percent in 2010 over 2009 levels. The Pentagon would get a 4 percent boost, to $534 billion next year, but would then get increases of 2 percent or less over the next several years.
Reserve fund for health care
Obama's plan proposes to build up a $634 billion reserve fund he would use to expand health care coverage to some of the 48 million currently uninsured Americans currently. The fund would represent a little more than half the money projected to be needed to extend health insurance to all Americans. Obama also asked for $205 billion to cover the costs of the wars in Iraq and Afghanistan through 2010, and wants to budget the costs of operations there at $50 billion annually over the next several years. The plan also contains a contentious proposal to raise hundreds of billions of dollars by auctioning off permits to exceed carbon emissions caps, which Obama wants to impose on users of fossil fuels to address global warming. The Medicare plan is sure to incite battles with hospitals, health insurance companies and drug manufacturers. Some of the Medicare savings would come from scaling back payments to private insurance plans that serve older Americans, which many analysts believe to be inflated. Other proposals include charging upper-income beneficiaries a higher premium for Medicare's prescription drug coverage. To raise the other half of the money for expanding health coverage, Obama wants to reduce the rate by which wealthier people can cut their taxes through deductions for mortgage interest, charitable contributions, local taxes and other expenses to 28 cents on the dollar, rather than the 35 cents they can claim now. Even more money would be raised if the top rate reverts to 39.6 percent, as Obama wants.