The dilemma facing Barack Obama in putting together his budget proposals is that he has to cut the US government’s long-term debt but not stall the economic recovery.
For the financial year starting 1st October, Washington plans to spend 3.8 trillion dollars.
The projected deficit is 1.27 trillion dollars, that is 19 percent lower than the shortfall this year.
There will be increased spending in areas like education and research and stimulating small businesses; airport security and military spending are also to be ring-fenced.
With the US unemployment rate at a near-record 10 percent, the White House budget’s biggest job-creation item is tax cuts for small businesses that expand their payrolls.
Obama wants to spend about 200 billion dollars for the wars in Iraq and Afghanistan as well as military operations in places like Pakistan and Yemen.
The losers include top earners who will see the amount of tax they pay increase, the banks will also be squeezed and less money will go to NASA for space exploration, as well as reducing climate change and efforts to improve the healthcare system.
Ninety billion dollars would come from imposing a fee on Wall Street firms to recoup money from the government’s financial bailout.
Fifty of the biggest US financial companies will bear the brunt of that.
Missing from the proposed budget is almost 650 billion dollars in projected revenue from the capping of greenhouse gas emissions. However it would have been difficult for Obama to get that particular measure approved by Congress.