Budget 11: Jobs, Jobs, Jobs
(Post 2009 figures are budgetary estimates!)
Barack Obama presented his $3.8 trillion budget yesterday to muted fanfares of fiscal responsibility and chagrin of NASA cuts. Obama’s budget seeks to rein in government spending while delicately attempting to revive the America’s flagging economy.
While the American press is hopping on the palitable story of how NASA’s Constellation program has been chopped off at the knees, the real meat. The real message of the budget is jobs, jobs, jobs.
The US jobless trend is scary. The past two years have seen the number of people seeking work double from 5% to almost 10%. These highs have not been seen since the early 1980’s.
Obama is addressing the weak employment numbers by applying over a $100B in stimulus programmes to staunch the flow of new jobless. Despite the announcement of the tax cuts for small businesses that hire employees, Obama’s budget forsees the percentage those out of work to drop ever slow slightly to average at 9.2%. Perhaps a nod to further economic weakness before Budget 11 comes into force on October 1st next?
The elephant in the room, however, is the US’s widening national debt now standing at over $12.2B. With the biggest deficit in history, can Obama’s reform pump the much needed stimulus in the US economy?
Budget 11 facts:
- $53B in tax cuts
- $30B in tax breaks to incentivise small business to hire new employees
- $6B for clean energy tech innovation
- $735M for full body scanners in airports
- $15.5B proposal aimed at IP from US firms being floated to international subsiduries in tax havens
- 3 year freeze on non-military and medical aid spending – aims to save $447B
- End to fossil fuel subsidies, raising $90B over next ten years
- 10 year old tax rates for the rich reinstated: 36% tax rate for single people earning $200k and over (up 3%), 36.9% for couples earning $250k and over (up 4.6%)
- New bipartisan fiscal commission composed of Democrats and Republicans
- Budget 11 kicks off Oct 1
Despite Obama’s tough love budget trying to balence the need to shave off unnecessary spending and apply the right sort of stimulus into the American economy, his stern hand on the tiller freezing Federal spending for three years might be too much for his Dem colleagues in the Congress. Pelosi has already been commenting that spending freezes should include Defence.