Obama aims to cut deficit in half by 2013

[rrl308]

WASHINGTON (Reuters) – President Barack Obama wants to slash America's ballooning deficit in half by 2013 by cutting spending on the Iraq war, eliminating wasteful public programs and raising taxes on the wealthy, an administration official said on Saturday.

"The deficit this administration inherited was $1.3 trillion or 9.2 percent of GDP. By 2013, the end of the president's first term, the budget cuts the deficit to $533 billion or 3.0 percent of GDP," the official said on condition of anonymity.

"Most of the savings will come from winding down the war in Iraq, increased (tax) revenue from those making more than $250,000 a year, and savings from making government work more efficiently and eliminating programs that do not work," the official said.

Obama's administration is due to deliver the outline of its first budget on Thursday, for the 2010 fiscal year. It will reflect big increases in spending on public works that were part of the $787 billion economic recovery plan that Obama signed this week.

"Over time, the budget deficit will make it harder for our economy to grow and create jobs. That's why the president's budget for FY (fiscal year) 2010 puts us on the path to cut the deficit he inherited on January 20, 2009, in half by the end of his first term," the administration official told Reuters.

Earlier on Saturday, Obama said he had ordered the U.S. Treasury to implement tax cuts for 95 percent of Americans, fulfilling a campaign pledge he hopes will help jolt the economy out of recession.

The tax cuts are part of the economic recovery plan passed by the Democratic-controlled Congress over Republican opposition. The aim is to put more money in the pockets of Americans and stimulate the economy by increasing consumer spending.

"I'm pleased to announce that this morning the Treasury Department began directing employers to reduce the amount of taxes withheld from paychecks, meaning that by April 1st, a typical family will begin taking home at least $65 more every month," Obama said in his weekly radio address.

"Never before in our history has a tax cut taken effect faster or gone to so many hard-working Americans," he said.

With tens of thousands of Americans losing their jobs in the midst of a global economic meltdown, Obama has said fixing the U.S. economy is his top priority. He has acknowledged that his success or failure in that will define his presidency.

http://news.yahoo.com/s/nm/20090221/ts_nm/us_obama

[mikey23545]

Well, he's certainly off to a great start.

[Guru]

Oh this is hysterical. LMAO

[BucEyedPea]

Yuh, uh-huh! I believe it when I see it. How many times have we heard this?

[Calcountry]

He wants to cut the budget in half by the first year in his SECOND term, lmao.

[BucEyedPea]

He wants to cut the budget in half by the first year in his SECOND term, lmao.

I know...don't they all say something similar to that. :shake:

[WoodDraw]

One thing I give him a lot of credit for is ending the terrible Bush era practice of using tricks to make the deficit seem smaller than it really is every year. That always drove me crazy.

We'll see if he can deliver on this. Sounds like most of the expected savings will come from ending Iraq, expiring tax cuts, and improved economy. Not exactly a radical solution, but it's something after that last eight years of not giving a shit. I'd like to see some true budget cuts and reform though to go along with the needed tax increase.

[Hydrae]

He wants to cut the budget in half by the first year in his SECOND term, lmao.

Not the whole budget, just the amount we are planning to spend over what we bring in.

I think I am right with that, the deficit is the negative amount at the bottom line of the budget, right? This is not talking about the total amount we are already in debt, he is saying we will slow down how much farther in debt we are getting each year.

Please correct me if I am wrong.

[banyon]

http://mikelove.files.wordpress.com/2007/12/deficit.gif

[Calcountry]

Nice graph. Now, if you please, overlay the same timeline with who controlled Congress. :D

[HonestChieffan]

Like Obama or not, this is borderline absurd. It shows me that either he is nuts or he assumes we are all nuts.

His campaign focused on increasing taxes on the "rich" and we never did quite find out what that definition is...but he had a great deal of focus on high income and capital gains as a source of new tax revenue. If you have not heard, the potential capital gains that were going to become taxable vanished in the last 90 days.

Tax revenues accrue from creation of taxable revenue. In case you have not heard, the economy is in the tank. The taxable revenues are down substantially.

The winding down of the Iraq experience seems to coincide with the starting up of the new Obama Afgan war. How will he pay for one while reducing the other...and how will he move men and materiel from one theater to another cheaply?

He just passed a bill that reduced taxes for a large part of the population. That tends to reduce tax income.

He just passed the largest spending bill since the beginning of time. Those tend to involve "spending". Spending tends to increase deficits if you spend more than you take in.


If you have not had your faith in this guy shaken yet, this has to make even the most strident Obama fan wonder.

[BigRedChief]

The winding down of the Iraq experience seems to coincide with the starting up of the new Obama Afgan war. How will he pay for one while reducing the other...and how will he move men and materiel from one theater to another cheaply?If it costs us too much money we are not going to hunt down and kill those responsible for the 9/11 attacks? Sorry but we don't have the money?

Those sumabitches that we are hunting down and killing in Afganistan killed over 3,000 americans and caused us a tremndous amount of economic and personal grief. The Afgan war is not a war against Afganistan but the terriosts and those who did and will provide aid and comfort to those same terriosts that killed Americans.

Obama is having to escalate this war because of Bush's taking his focus off Afganistan where it should have been. The money we are committing to this war and the Americans we are putting in harms way is righteous.

[SHTSPRAYER]

If you have not had your faith in this guy shaken yet, this has to make even the most strident Obama fan wonder.

"Moscow is in our sites! Russia will fall in no more than two weeks!" Gen. Paulus, German 6th Army 1941

[HonestChieffan]

Oh heck I forgot to blame Bush for something. Its all part of dealing with reality.

[BigRedChief]

Nice graph. Now, if you please, overlay the same timeline with who controlled Congress. :D
Who would be against slashing the deficit?and if so why?

[HonestChieffan]

Who would be against slashing the deficit?and if so why?

Who can argue that we need to slash the deficit while signing the largest spending bill in history adding trillions to the deficit....only someone totally out of touch with reality

oh I forgot. Bush evil bad man bush hate bush.

[Jenson71]

Like Obama or not, this is borderline absurd. It shows me that either he is nuts or he assumes we are all nuts.

His campaign focused on increasing taxes on the "rich" and we never did quite find out what that definition is...but he had a great deal of focus on high income and capital gains as a source of new tax revenue. If you have not heard, the potential capital gains that were going to become taxable vanished in the last 90 days.

Repeatedly, the phrase was "making over $250,000"

[HonestChieffan]

There are too few people in the 250 grand and above group to substantially impact tax revenues. Its not mystical voodo math, its just reality. The tax has to come from the greatest numbers of people not a few at the very top or you cant get enough money to impact anything.

[headsnap]

Repeatedly, the phrase was "making over $250,000"

then it was $200,000, then $175,000, then $150,000, etc...

[BucEyedPea]

There are too few people in the 250 grand and above group to substantially impact tax revenues. Its not mystical voodo math, its just reality. The tax has to come from the greatest numbers of people not a few at the very top or you cant get enough money to impact anything.

But, but....we're the ones that are operating on our imaginations, not reality!

[Dave Lane]

I know...don't they all say something similar to that. :shake:

And Clinton did do it.

[Saul Good]

And Clinton did do it.
By himself? Didn't congress have something to do with it as well?

[RINGLEADER]

We'll see if he can deliver on this. Sounds like most of the expected savings will come from ending Iraq, expiring tax cuts, and improved economy. Not exactly a radical solution, but it's something after that last eight years of not giving a shit. I'd like to see some true budget cuts and reform though to go along with the needed tax increase.

Well he's promising to cut the operational budget in half based on the current numbers. His promise to cut it in half still leaves us with a deficit that is bigger than any ever seen (prior to last year when this "emergency" began).

It goes to my point a few weeks ago that the Dems would see this level of spending as ordinary. The fact that Obama wants to get credit from cutting from what were supposed to be one-time extraordinary events underscores this belief.

As far as raising taxes on the rich is concerned -- good luck. Saw Ed Rendell on TV this morning saying raising taxes worked under Clinton which is completely disingenous and doesn't acknowledge the fact that there was an enormous capital influx, an unsustainable level of capital gains, and a much larger investor class with the money to pay the taxes that were levied. NONE of those things are true now. In fact, it's just the opposite.

But the Dems promised and promoted all this "change" so we shouldn't be surprised that this is what we're getting.

[RINGLEADER]

And Clinton did do it.

Like I said, you take away the increased revenues from extraordinary capital gains and charges against capital and Clinton's deficits are pretty similar to those that came before him. There was approximately $400 million in capital gains during Clinton's last four years and a lot of the projected deficit reduction going forward didn't materialize when the capital gains revenues dropped from approximately $120 million in 2000 to around $50 million the following year when the dot-com crash occured. The capital gains projections weren't sustainable and, not surprisingly, they weren't sustained.

To this point I don't believe the federal deficit was paid down $.01 during the Clinton administration.

[Simplex3]

Only in the federal government is the promise to cut the bleeding in half over a five year period seen as "awesome".

The state of KS managed to stop the bleeding entirely in one bill. Are the feds so incompetent that a bunch of local yokels can show them up?

[SHTSPRAYER]

Oh heck I forgot to blame Bush for something. Its all part of dealing with reality.

Funny:

http://blamebush.typepad.com/blamebush/

[Stewie]

This is absolutely NOT possible. If we stopped bleeding money RIGHT NOW we can't pay our obligations, EVER.

And the graph of a Clinton surplus, there was never a surplus. The reason for better fiscal numbers in that time frame was due to the stock market bubble and billions and billions paid in capital gains taxes. It all came crashing down, but hey, it looks pretty on a graph with no explanation.

[HonestChieffan]

This is absolutely NOT possible. If we stopped bleeding money RIGHT NOW we can't pay our obligations, EVER.

And the graph of a Clinton surplus, there was never a surplus. The reason for better fiscal numbers in that time frame was due to the stock market bubble and billions and billions paid in capital gains taxes. It all came crashing down, but hey, it looks pretty on a graph with no explanation.

Oh man you are doubting the majic negro's math! stop that

[memyselfI]

He's the Messiah. He can do it. ROFL

[petegz28]

He can't do it as long as Pelosi is in charge of the Congress. He might get Reid to go along but not the money-hugry Pelosi.

[Direckshun]

There's enough stupid in this thread to sink a boat.

I think it is WAY too premature for Obama to unveil this.

He should sit on his hands on this front, instead of concerning us with lowering the deficit, because fixing the deficit has never ended a recession this severe.

[petegz28]

There's enough stupid in this thread to sink a boat.

I think it is WAY too premature for Obama to unveil this.

He should sit on his hands on this front, instead of concerning us with lowering the deficit, because fixing the deficit has never ended a recession this severe.

Actually I am going to disagree here. A balanced budget has several intangibles that would actually strengthen this country and our economic situation. We can't have a trade deficit and a budget deficit together. Well we can, but that gets us to where we are now.

[Direckshun]

Actually I am going to disagree here. A balanced budget has several intangibles that would actually strengthen this country and our economic situation. We can't have a trade deficit and a budget deficit together. Well we can, but that gets us to where we are now.

I won't disagree with you. A balanced budget has tangible benefits that bears itself out from our economic clout worldwide, down to the very value of our money.

But a balanced budget is not *the* answer to a recession.

It is an important element of cementing the recovery of a recession, and it's good to know the Obama administration has long-term plans to solidify the budget (whether they are good plans or not remains to be seen), but it cannot be a primary concern right now.

[petegz28]

I won't disagree with you. A balanced budget has tangible benefits that bears itself out from our economic clout worldwide, down to the very value of our money.

But a balanced budget is not *the* answer to a recession.

It is an important element of cementing the recovery of a recession, and it's good to know the Obama administration has long-term plans to solidify the budget (whether they are good plans or not remains to be seen), but it cannot be a primary concern right now.

Then the focus has to be the trade deficit. Has to be one or the other.

[Direckshun]

Then the focus has to be the trade deficit. Has to be one or the other.

Not that I disagree, but how do you figure?

[Calcountry]

Who would be against slashing the deficit?and if so why?If my leader told me it was good, then duh, it must be good, derrr.

[Calcountry]

If it costs us too much money we are not going to hunt down and kill those responsible for the 9/11 attacks? Sorry but we don't have the money?

Those sumabitches that we are hunting down and killing in Afganistan killed over 3,000 americans and caused us a tremndous amount of economic and personal grief. The Afgan war is not a war against Afganistan but the terriosts and those who did and will provide aid and comfort to those same terriosts that killed Americans.

Obama is having to escalate this war because of Bush's taking his focus off Afganistan where it should have been. The money we are committing to this war and the Americans we are putting in harms way is righteous.Click them heels together dude.
This is Obama's war.

[petegz28]

Not that I disagree, but how do you figure?

I just figure. Means we aren't creating anything to earn money and we are spending more than we have at the same time.

[Calcountry]

There's enough stupid in this thread to sink a boat.

I think it is WAY too premature for Obama to unveil this.

He should sit on his hands on this front, instead of concerning us with lowering the deficit, because fixing the deficit has never ended a recession this severe.:clap: no need to read any further.

[patteeu]

Repeatedly, the phrase was "making over $250,000"

Until it became $200,000, and then later, $150,000. There was no clear definition offered.

[Messier]

Until it became $200,000, and then later, $150,000. There was no clear definition offered.

That's not accurate.

[donkhater]

There are three things that would totally and swiftly bring this country around again.

1. Get the hell out of Iraq and Afghanastan. If you still want to fight a covert war to find Bin Laden, so be it. But nation building is the quickiest way to financial ruin.

2. Fine anyone who employs illegal immigrants. At least to the level that it would be punative to continue the practice. Those "shovel-ready jobs?" How many will end up in the hands of contractors that use illegal labor? My guess is a lot. Not only are illegal immigrants taxing the health and government agencies, they ship a large sum of what they earn back to their countries. California is learning this lesson the hard way.

Oh, and you just brought home thousands of soldiers to patrol that border down there to the south.

3. Suspend the capital gains tax. You want people to put money into businesses? This is the most fail-safe way to do it. The economy would surge--the right way.

The first two steps eliminate a TON of wasteful spending, while the last one gets the economy cranked up. You're welcome.

[Garcia Bronco]

2013? He'll be out of office by then.

[Garcia Bronco]

Like I said, you take away the increased revenues from extraordinary capital gains and charges against capital and Clinton's deficits are pretty similar to those that came before him. There was approximately $400 million in capital gains during Clinton's last four years and a lot of the projected deficit reduction going forward didn't materialize when the capital gains revenues dropped from approximately $120 million in 2000 to around $50 million the following year when the dot-com crash occured. The capital gains projections weren't sustainable and, not surprisingly, they weren't sustained.

To this point I don't believe the federal deficit was paid down $.01 during the Clinton administration.

It wasn't. It's all numbers on a ledger of projected money. It was never cash on hand.

[RINGLEADER]

There's enough stupid in this thread to sink a boat.

I think it is WAY too premature for Obama to unveil this.

He should sit on his hands on this front, instead of concerning us with lowering the deficit, because fixing the deficit has never ended a recession this severe.

No, he should double the deficit under the guise of emergency one-time spending then hail it a success when he cuts that doubled deficit in half! Not only is he letting us know that we'll be doubling spending for the next three years but he gets headlines for cutting the deficit in half at the same time! Genius!

[patteeu]

That's not accurate.

It's more accurate than the notion that Obama clearly defined what he meant by "rich" in a way that was never contradicted by his own statements or those of senior members of his campaign.

[tmax63]

Nothing like raising taxes on the wealthy to cut the deficit. The only problem is that even using the high side $250,000 as wealthy, about any company that employs more than about 4 people falls in that class and jacking the taxes on them gets about 2 people laid off so they can pay the taxes. I can believe them cutting the military to the bone but somehow I don't see all the entitlement programs being cut although saying that you was gonna increase spending by 5 percent but since times are hard you'll only do 3% is in Washington-speak a 2% cut.

[HonestChieffan]

Obonomics!!