Budgeting for a New Era of Responsibility

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Budgeting for a New Era of Responsibility
Posted by Jesse Lee on February 01, 2010 at 04:34 PM EST


Earlier today, President Obama discussed the 2011 budget, reflecting on the challenges for the country and the steps the administration is taking to meet them. While acknowledging that the inherited $1.3 trillion deficit from the previous administration can’t be brought down overnight, he relayed his continuing efforts to rein in spending and "lay a new foundation for lasting growth."

The President mentioned essential investments in areas of clean energy and scientific research included in the budget to foster jobs of the future. He proposed a 6 percent increase in funding for the Education Department to revitalize community colleges and make colleges more affordable. "In the 21st century there is no better anti-poverty program than a world-class education."

While making investments for future economic success, President Obama outlined the tough spending cuts to reduce the current deficit, and proposed a freeze in government spending for three years, excluding benefits from Social Security, Medicaid, Medicare, and benefits for veterans. He discussed the $20 billion in cuts for programs that are inefficient or have outlived their usefulness, and cuts for worthy programs that must be trimmed accordingly. "We have to do what families across America are doing: Save where we can so that we can afford what we need."

The freeze will not apply towards national security, though the President made clear that this does not mean a free pass: "even though the Department of Defense is exempt from the budget freeze, it's not exempt from budget common sense."

Helping to bring the deficit down in the coming years, a responsibility fee on big banks to compensate taxpayers for the bailout, and tax breaks for oil companies, investment fund managers, and those making over $250,000 a year would be ended.

To enforce responsible spending, the budget restores pay-as-you-go legislation, which allows Congress to spend a dollar only if it cuts a dollar elsewhere. President also proposed a bipartisan fiscal commission to encourage Democrats and Republicans to work together to create deficit-reducing proposals by a deadline.

These budget policies are projected to decrease the deficit by $1.2 trillion over 10 years. Visit the FY 2011 Budget website for details about different departments, terminations and reductions, or to learn how the budget will affect your state.