Obama's $3.8 Trillion Dollar Plan

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On February 5, 2010, the Labor Department released its January unemployment report as well as their estimate of how many jobs have been lost since March of 2009. It is estimated that 8 million jobs will be lost during the current recession within the United States as well as a predicted unemployment rate that will reach 10.1%. Economists are theorizing that high unemployment is preventing consumer spending. In addition businesses are reluctant to hire more workers without knowing if a government stimulus will continue.
Regardless, this recent unemployment report still is encouraging to the Obama administration. Secretary of the Treasury, Timothy Geithner, was quoted recently saying, “We are seeing some encouraging signs of healing. This is going to take a while, and it [the economic recovery] is going to be uneven. But there are encouraging signs in this [unemployment] report”
Recently, Obama proposed a new $3.8 trillion dollar plan to Congress on February 1st that concentrates on energy, health care, and education, with a predicted decrease in the $1.6 trillion dollar deficit by $3 billion. About $150 billion of this new budget proposal will go to energy. He plans for it to increase the nation’s supply of energy, while also creating more jobs. Nearly $75 billion will go to research and development. About $634 billion of this is planned to go towards a budget for healthcare. Keith Fontenot, a budget aide, was quoted saying “We aim to get to universal coverage.” He also mentioned that Obama was open to new ideas and is willing to work with Congress and compromise to create a reasonable plan for healthcare. The plan mainly concentrates on decreasing the amount of uninsured Americans as well as improving the quality of care, and save the average family about $2500 yearly, as well as save the Medicare and Medicaid programs money. The education portion of the plan will decrease student loan costs and a large portion will also go to the Pell Grant program which is an educational federal grant program for undergraduates who require a large amount of financial aid.
The money for this budget is proposed to come from the expiration of George W. Bush’s tax cuts for high income families making more than $250,000 per household. It also calls for a temporary three year halt on non-defense discretionary spending which will alone save about $250 billion over the next 10 years. House Republican Eric Cantor was quoted saying “The President's budget spends more than any other in history, creates the largest deficits in history, and imposes the largest tax increases in history -- at a time when our country can least afford it." On the other hand of the issue however, if this budget is passed, the deficit in 2011 would reach 8.3% of the U.S. GDP (Gross Domestic Product) from the 10.6% and by 2014 it would drop to 3.9%. Economists consider a deficit of 3% of GDP sustainable.

Congress and Obama created this $3.8 trillion dollar plan in the hopes of continuing to try reducing the national deficit. Obama was recently quoted at a White House presentation saying “We simply cannot continue to spend as if deficits don't have consequences, as if waste doesn't matter. It's time to save what we can, spend what we must and live within our means once again." Last year, a $787 billion dollar stimulus plan was also created by Obama and Congress to deal with healthcare, environmental legislation as well as public works, in response to the state the office was left in after George W. Bush’s two terms. Although the former president came into office with a huge budget surplus, he left Barack Obama extremely high budget deficits. The moment Obama was sworn in; he had a $1.2 trillion dollar deficit passed down for him to deal with.





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