Budget plan would leave deepest hole since 1945

WASHINGTON — President Obama on Thursday delivered to Congress a $3.6 trillion spending plan that would finance vast new investments in health care, energy independence and education by raising taxes on the oil-and-gas industry, hedge-fund managers, multinational corporations and more than 2 million of the nation's top earners.

The blueprint, meanwhile, would overhaul federal programs to strengthen assistance for millions of people who have borne the consequences of what Obama called "an era of profound irresponsibility," helping them pay for college, train for better jobs and save for retirement while taxing less of their earnings.

The agenda for the fiscal year that begins in October would not come cheap. This year's budget deficit, swollen by spending to combat a severe recession, would hit a record $1.75 trillion, or 12.3 percent of the overall economy, the highest since 1945. While Obama inherited the bulk of that gap, his budget would allow for a fresh round of spending to prop up troubled financial institutions that could hit $750 billion.

Next year's deficit would approach $1.2 trillion. But Obama proposes to cut that figure roughly in half by the end of 2012, in large part by levying nearly $1 trillion in new taxes on the highest earners, defined as families with gross income of more than $250,000 a year.

In unveiling the outline of his spending priorities, Obama acknowledged his proposal would "add to our deficits in the short term to provide immediate relief to families and get our economy moving." But he argued that the economic crisis should not be used as an excuse to delay costly investments intended to modernize the economy, enhance the work force and, ultimately, reduce government spending.

"What I won't do is sacrifice investments that will make America stronger, more competitive and more prosperous in the 21st century, investments that have been neglected for too long," Obama said. Citing the need to "break free" from foreign oil, reduce "crushing health-care costs" and improve public education, Obama said: "These investments must be America's priorities, and that's what they will be when I sign this budget into law."

Source seattletimes.nwsource.com/html/politics/2008791874_budget27.htm