President Obama just delivered an address on today’s Budget 11. Some of the key takeaways of the speech:
- More than 6% increase to Education Dept
- Eliminate wasteful subsidy to banks that provide loans to college students
- A Goverment spending freeze for 3 years. MedicAid, MedicCare, Dept of Defence and veterans benefits go untouched.
- This year, $20B was cut from the budget. It’s a continuation of the $17B in cuts found last year.
- Examples of areas cut – mining cleaning program, forest service cuts, refurbishment of a facility belonging to the Dept of Energy
- Other cuts were more painful – eliminate a Government program to clean buildings. A $120m program to get earned income tax credit in advance, Obama said 80% of people didn’t comply with terms of program.
- Obama asked for asking Democrats and Republicans to look at the spending of programmes
- The SAVE programme that asked fed employees to suggest improvements taken into account.
- Even though Department of Defence is exempt from budget freeze, not exempt from sensible decision-making. Obama
- Cut to taxes for the Middle Class are up, but big earners e.g. individuals that earn over $250k a year an oil companies are not exempt from cuts.
Obama finished off his speech by proposing a bipartisan fiscal commission. He said the idea had strong bipartisan support citing a lot of Republican cosponsors for the initiative. Despite it getting voted down in the Senate, he said it was a needed if American had to go ahead and fully embrace to get it’s “arms around the budget”.
Obama continued by saying that politicians needed to readopt the Pay As Go rule, so if money is needed for programmes it must be found from other programmes. He said this approach lead to budget surpluses of the 1990s.
More details on Budget 11 on budget.gov.
More analysis to come