The First Obama Budget

Today marks the day of the introduction of the first Obama administration budget proposal. Much remains to be seen, but this looks like a Democratic budget for a change. See the full story here (.PDF) or get an initial summary here. Highlights include:

A total for 2009 fiscal year of $3.94 trillion. (Yes, that's trillion). For FY 2010, the proposed budget is $3.55 trillion.

The deficit for FY 2009 under the Obama plan would be $1.75 trillion. That's equal to 12.3% of GDP, the highest percentage of GDP of any budget deficit since the end of World War II, when the deficit was 21.5% of GDP.

The proposal includes the creation of a $634 billion "reserve fund" that will be used to pay for health care reform, presumably for universal coverage of all Americans. This will be paid for in part by allowing the Bush tax cuts for the wealthy to expire.

Tax cuts to low-income individuals and families included in the stimulus bill will be continued in to subsequent years.

Revenues will also be increased by the implementation of a carbon cap-and-trade program in which the government sells permits to manufacturers who emit large amounts of greenhouse gases.

The military budget would be $534 billion for regular expenditures in 2010; the Iraq and Afghanistan wars will cost an additional $130 billion. The Army and Marine Corps will increase in size, but spending on Cold-war relics like missile defense systems and similar weapons programs will be cut.

$250 billion is being put in as a "place holder" in case it's needed to prop up failing banks.

The budget includes many green provisions, such as aid to the US automakers to develop and produce more fuel efficient cars, for improvements in the electrical grid to transmit energy generated by alternative sources such as wind farms, and weatherization programs.

Many regulatory programs and agencies that were starved of funding under the Bush administration, such as health and safety monitoring through the Department of Labor and EPA monitoring of the environment, will be increased.

This budget proposal allows plenty of room for Republican howls. We can all anticipate the noise about to arise from the right. Now we can await responses from both our Senators and from our sole Representative. Let us take bets on who will be supportive and who will be critical.

Peace.