White House: Budget deficit to top $1.8 trillion, 4 times 2008’s record
* Andrew Taylor, Associated Press Writer
* On Monday May 11, 2009, 11:09 am EDT
WASHINGTON (AP) — With the economy performing worse than hoped, revised White House figures point to deepening budget deficits, with the government borrowing almost 50 cents for every dollar it spends this year.
The deficit for the current budget year will rise by $89 billion to above $1.8 trillion — about four times the record set just last year. The unprecedented red ink flows from the deep recession, the Wall Street bailout, the cost of President Barack Obama’s economic stimulus bill, as well as a structural imbalance between what the government spends and what it takes in.
As the economy performs worse than expected, the deficit for the 2010 budget year beginning in October will worsen by $87 billion to $1.3 trillion, the White House says. The deterioration reflects lower tax revenues and higher costs for bank failures, unemployment benefits and food stamps.
For the current year, the government would borrow 46 cents for every dollar it takes to run the government under the administration’s plan. In one of the few positive signs, the actual 2009 deficit is likely to be $250 billion less than predicted because Congress is unlikely to provide another $250 billion in financial bailout money.
The developments come as the White House completes the official release of its $3.6 trillion budget for 2010, adding detail to some of its tax proposals and ideas for producing health care savings. The White House budget is a recommendation to Congress that represents Obama’s fiscal and policy vision for the next decade.
Annual deficits would never dip below $500 billion and would total $7.1 trillion over 2010-2019. Even those dismal figures rely on economic projections that are significantly more optimistic — just a 1.2 percent decline in gross domestic product this year and a 3.2 percent growth rate for 2010 — than those forecast by private sector economists and the Congressional Budget Office.
For the most part, Obama’s updated budget tracks the 134-page outline he submitted to lawmakers in February. His budget remains a bold but contentious document that proposes higher taxes for the wealthy, a hotly contested effort to combat global warming and the first steps toward guaranteed health care for all.
Obama’s Democratic allies controlling Congress have already made it clear that they will reject key elements of his plan. Already apparently dead is a plan to raise $267 billion over the next decade to pay for his health care initiative by curbing the ability of wealthier people to reduce their tax bills through deductions for mortgage interest, charitable contributions and state and local taxes.
And the congressional budget plan approved last month would not extend Obama’s signature $400 tax credit for most workers — $800 for couples — after it expires at the end of next year.
Obama’s remarkably controversial “cap-and-trade” proposal to curb heat-trapping greenhouse gas emissions is also reeling from opposition from Capitol Hill Democrats from coal-producing regions and states with concentrations of heavy industry. Under cap-and-trade, the government would auction permits to emit heat-trapping gases, with the costs being passed on to consumers via higher gasoline and electric bills.
Among the new proposals is a plan — already on its way through Congress — that would increase the Federal Deposit Insurance Corporation’s borrowing authority from $30 billion to $100 billion in order to grant a two-year reprieve from higher deposit insurance premiums while the industry is struggling.
Also new are several tax “loophole” closures and increased IRS tax compliance efforts to raise $58 billion over the next decade to help finance Obama’s health care measure. The money makes up for revenue losses stemming from lower-than-hoped estimates of his proposal to limit wealthier people’s ability to maximize their itemized deductions.
The updated budget also would repeal an unintended tax windfall taken by paper companies that use a byproduct in the paper-making process as fuel to power their mills. The tax credits were never intended for paper companies, but now they could be worth more than $3 billion a year, according to a congressional estimate.
The budget would make permanent the expanded $2,500 tax credit for college expenses that was provided for two years in the just-passed economic stimulus bill. It also would renew most of the Bush tax cuts enacted in 2001 and 2003, and would permanently update the alternative minimum tax so that it would hit fewer middle- to upper-income taxpayers.
The Bloomberg administration has quietly begun charging rent to homeless families who live in publicly run shelters but have income from jobs.
The new policy is based on a 1997 state law that was not enforced until last week, when shelter operators across the city began requiring residents to pay a certain portion of their income. The amount varies based on factors that include family size and what shelter is being used, but should not exceed 50 percent of a family’s income, a state official said.
Vanessa Dacosta, who earns $8.40 an hour as a cashier at Sbarro, received a notice under her door several weeks ago informing her that she had to give $336 of her approximately $800 per month in wages to the Clinton Family Inn, a shelter in Hell’s Kitchen where she has lived since March.
“It’s not right,” said Ms. Dacosta, a single mother of a 2-year-old who said she spends nearly $100 a week on child care. “I pay my baby sitter, I buy diapers, and I’m trying to save money so I can get out of here. I don’t want to be in the shelter forever.”
Perhaps a coalition of the willing between Obama’s Dept. of Homeland Security and Liberal Academics?
And why is the federal government in the business of giving federal grants for “research” to crap universities like this?
“THE RIGHT IN THESE TIMES:
UNDERSTANDING AND COMBATING CONTEMPORARY SHIFTS TO THE RIGHT
Second Annual Conference on “Rightist Movements”
Friday, May 1, 2009
The Graduate Center, City University of New York
365 Fifth Avenue
Free and Open to the Public
In light of the election of Barack Obama and rollback of the conservative movement’s dominance in the U.S. political arena, analyses have predominantly focused on new openings and possibilities for the left. Yet how various factions on the right proceed at this critical juncture will prove crucial to understanding U.S. political and popular culture for years to come, with significant implications for those working on a wide range of issues, from economic justice and international human rights to racism, immigration, gender discrimination and sexual freedom.
This conference brings together academic researchers, activists, and representatives of non-governmental organizations involved in understanding and contesting both contemporary trends toward the right and rightist efforts, from fiscally or socially conservative movements to hate groups. The aim of the conference is to draw on the insights of those conducting this important work across diverse professional fields toward an understanding of shifts to the right currently underway, as well as to build alliances and encourage collaboration between activists and academic and non-academic thinkers and researchers.”
Obama’s Hope and Change = Doubling Your Taxes
Op-ed on CNN: Why Your Taxes May Double, by David M. Walker (President & CEO, Peter G. Peterson Foundation; Former Comptroller General of the United States and Head of the Government Accountability Office):
Even under the best of economic circumstances, tax season is a tense time for American households. The number of hours we collectively spend working on our returns is probably a lot more than government agencies claim.
The burden in financial terms is even greater: A recent independent survey found that the average American’s total federal, state and local tax bill roughly equals his or her entire earnings from January 1 up until right before tax day.
Now imagine that tax bill doubling over time. …
Regardless of what politicians tell you, any additional accumulations of debt are, absent dramatic reductions in the size and role of government, basically deferred tax increases. Remember the old saw? “You can pay me now or you can pay me later, with interest.”
To help put things in perspective, the Peterson Foundation calculated the federal government accumulated $56.4 trillion in total liabilities and unfunded promises for Medicare and Social Security as of September 30, 2008. … If $56.4 trillion in financial commitments is too big a number to digest, think of it as $483,000 per American household, or $184,000 for every man, woman and child in the country. …
Meet Owen & Payne, partners in a fictional accounting firm that specializes in helping Americans fill out the “new” Form 483000, which spells out how our elected officials are putting our nation into more and more debt and how that bill eventually will have to be paid: By doubling your taxes. The campaign is all in fun, but the intent is very serious.
Unless we begin to get our fiscal house in order, there’s simply no other way to handle our ever-mounting debt burdens except by doubling taxes over time. Otherwise, our growing commitments for Medicare and Social Security benefits will gradually squeeze out spending on other vital programs such as education, research and development, and infrastructure.
For anyone who has recently gone to law school but is afraid of paying back their loans, here is some helpful information:
There are several new programs that may help you to follow your dream to help people rather than bill hours, while making sure that you don’t have to take on a second job to cover your debt. The first program won’t be up and running until July 2009, but it could certainly benefit many underpaid and overdebted do-gooders. The Department of Education’s Income Based Repayment Plan essentially caps the percentage of your discretionary income you are expected to pay toward your student loan debt. (This calculator can help you determine whether you are eligible, but only the department can give you a final verdict.) Heather Jarvis of Equal Justice Works (on their very useful student loan podcast) says that an easy calculation is that anyone who owes more than their annual salary will likely be eligible. Take extra caution if you are married and filing jointly: Both spouses’ income will be counted to determine your eligibility. Also be sure to pay attention to what type of loans you have, as not all types of federal loans are eligible.
The Public Service Loan Forgiveness program is another possibility for you. This new program requires individuals to make 120 eligible monthly payments toward their qualifying student loans while working full-time in government, at a 501(c)(3), or in another qualifying profession (including early-childhood education, social work, faculty teaching in high-need areas …). At the end of that period, the government will forgive the remaining balance. This program is intricate: Be sure to read more about it or even use this checklist as a guide.
Remember, the quicker you pay back your loans, the less interest you end up paying the banks (a/k/a the government a/k/a the taxpayer a/k/a yourself)
Another good website to visit is: http://www.usnews.com/usnews/biztech/articles/070221/21loanmarketing.htm
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