Earlier today President Obama released his FY 2011 budget proposal, focusing heavily on creating jobs, controlling federal spending and reducing the deficit.
Key tables drawn from the president’s budget reflect the following.
- DEFICITS: Last year’s record deficit ($1.413 trillion, 9.9% of GDP) is eclipsed by the President’s fiscal year 2010 deficit estimate of $1.556 trillion, 10.6% of GDP.
- DEBT: The President’s budget projects debt held by the public ($7.5 trillion in 2009) to more than double by 2017.
- TAXES: The President’s budget includes a net tax increase of $1.7 trillion over ten years. Upper-income individuals would pay $969 billion more thru a combination of higher marginal rates and disallowed deductions. Multinational corporations would pay $122 billion more by through a series of proposals including the denial of interest deductions on deferred income and foreign tax credit changes; oil, gas and coal companies would pay $40 billion more.
- HEALTH: The President’s budget includes a “placeholder” for health care reform instead of specific proposals. His health insurance reform allowance reflects a $127 billion net deficit decrease over five years and $150 billion net deficit decrease over ten years, which is described as the average budget impacts of the House- and Senate-passed health care reform bills, extrapolated to 2020 and adjusted to remove the effects of provisions explicitly listed elsewhere in the budget.
- FISCAL COMMISSION: The President will create a commission charged with balancing the budget (excluding net interest payments) by 2015 in an effort to “stabilize” the debt/GDP ratio. The budget currently produces a $752 billion deficit in 2015 and $571 billion in interest costs, meaning the commission would need to produce at least $181 billion in net deficit savings in that year beyond the assumptions included in this budget.
- STIMULUS: $169 billion in temporary tax cuts and spending programs for economic recovery – designated as an emergency and not subject to PAYGO – including Making Work Pay tax credit, COBRA assistance, bonus depreciation, small business expensing, 6-month FMAP extension, and other proposals.
ASA will continue to monitor developments and will provide updates to members. In the meantime, please use the following links for more information: