The First Draft: Budget Day

February 26, 2009

The Obama administration’s first budget doesn’t officially come out until late morning — but somehow some unnamed senior government officials managed to divulge the basic size and shape of the thing. The big numbers are really big this time: the 2009 deficit forecast is $1.75 trillion, with a T. That’s 12.3 percent of the U.S. gross domestic product, the largest share since World War II.

FINANCIAL/KOREA

The new White House team has pledged to cut in half the more than $1 trillion deficit they inherited from the Bush administration by 2012. They say they’ll do that by cutting spending on farm subsidies and other areas. There will also be a 10-year, $634 billion reserve fund to help pay for healthcare reforms.

But there should be hundreds of billions of dollars of revenues starting in 2012 and going forward for years from a cap-and-trade system meant to reduce climate-warming greenhouse gas emissions.

For those outside the Beltway, Budget Day is just a day on the calendar. In Washington DC, it’s a day for keeping score and figuring out who wins and who loses in the proposed financial picture.

Before the official release, there was gloomy news from the Commerce Department. New U.S. orders for durable goods fell for a sixth month in a row, to the lowest level is six years.

President Barack Obama makes his first comments on the budget more than an hour before it’s official release at 11 a.m. EST. At that time, Peter Orszag, the chief of the White House Office of Management and Budget, briefs the media, with other briefings on health and defense spending.

Photo credit: REUTERS/Lee Jae Won (Bank employee counts hundred-dollar bills in Seoul, South Korea, February 26, 2009)

6 comments

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“1.75 trillion dollars”,what a big number.i did not think it is need so many money for the recession.the reason of the recession is not the goverment have too much money, it is because most of the money is owned by the little.citizens can’t buy life necessary for they don’t have enough money in their wallet.so they are scared of consumption.who would spent tommorow or the last money in this situation.i think it is necessary to make the rich spent their excessive money.if they did’t do,we can take more tax with them.it is a very moment,we need very way.

Posted by tkbutcher | Report as abusive

The media is already reinforcing the notion in the minds of Americans that they should measure the budget and the actions being taken against the loss of confidence of our financial system on whether they are as individuals winners and losers. The reason why our financial system is in shambles is exactly this ‘what’s in it for me’ bullsit attitude. If we do not break from this form of thinking there is no doubt that my children will be walking on the ends of leashes held by foreigners and I will be converting my dollar assets into Renminbi.

Posted by Craig Teuber | Report as abusive

[...] Peter Orszag, the chief of the White House Office of Management and Budget, briefs the media, Read More|||Direct to Budget and Supporting Materials Organized by Department. Source: Office of Management [...]

The people are now getting what they deserve for voting in a democratic president with a democratic congress.

Unfortunately, those of us who did not vote this persuasion are being dragged down by those who did.

O’Bama is a nice guy, but not the right person for the job.

Posted by Maryann | Report as abusive

The people are indeed getting what they deserve. It has become apparent over the past two weeks that this administration has no idea what it is doing and the voters who elected this President have no idea what he is doing. Just see what the Dow has done since inauguration. People that invest their own money know that the catastrophe is just now beginning.

Federal debt and deficit spending are the single biggest hurdles the economy has to get over before private enterprise can thrive. When government competes for money in the capital markets, the cost of doing business on Main Street goes up and jobs are lost.

Hang on folks. This will be a long, hard, ugly ride.

MAS1916:

Lucky for us, at the same time as the government is borrowing money at abismal rates, decreasing the supply and increasing the cost of capital, they are increasing the supply by printing money…oh equilibrium…until the government someday(hopefully) pays off the debt and the increase in money supple is realized leading to drastic inflation…

It will be a long next few decades unless things get turned around real soon, is Obama the guy to turn it around? I hope so but I don’t think so. I think a country needs a fiscal conservative to get out of an economic hole like this, in the long term at least. (And don’t tell me that the Bush years are examples of what fiscal conservativism does, he wasn’t a conservative in that fasion)

Posted by Matt | Report as abusive

Let’s just resolve to send the community organizer back to his “organized” community in Chicago. NO EXPERIENCE in leadership, never created a job and only ever spent other people’s money. Plus that awful wife of his. (BTW what was with that sundress she wore to his big speech? I thought she looked out of place in that otherwise respectful and appropriately well-dressed crowd.)

Posted by Anne | Report as abusive