As expected, President Obama proposed a $3.8 trillion budget for Fiscal 2011, including a projected record deficit of $1.6 trillion.
The budget, which would begin in October, includes about $100 billion in additional tax cuts and spending on public works projects that the president hopes will spur jobs.
The Obama administration said its proposed tax cuts for families and businesses would total about $300 billion over the decade, including a third-year extension of the “Making Work Pay” tax credit designed to offset payroll taxes for 110 million lower- and middle-income workers.
Also proposed is an increase in child care tax credit, eliminating capital gains taxes on new investments for small businesses, and extending through the current fiscal year a holdover from the stimulus package that allows small business to write off in the first year up to $250,000 in equipment investments.
The president also wants $25 billion for state governments hit hard by the recession to help offset Medicaid funding costs for the poor.
Obama plans to appoint a new debt commission to come up with recommendations on how to meet his previously announced pledge to bring the deficit figure down to the equivalent of 3 percent of GDP by 2015.
The current budget proposal is about 10.6 percent of GDP.
However, projections state that the deficit would drop to $700 billion in 2013 and 2014, on assumptions of economic recovery, rising tax receipts and a drop in stimulus spending.
The budget also includes a projected $20 billion in savings from ending or cutting back on some 120 programs, including NASA’s project to return to the moon.
The administration added that it was proposing the largest funding increase in the history of the Elementary and Secondary Education Act, a $3 billion hike to $28 billion.
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