The President's Budget

President Obama introduced the nation's federal budget for fiscal 2010/2011 that begins October 1 and projects a deficit of $1.27 trillion. Those numbers are unacceptable to Mr. Obama and should be. He does understand the problem and is willing to admit to it and plans to do something about it. The big problem is the country can not overcome 20 years of deficit spending and debt in a short time and put the governments house back in fiscal order like it was on the watch of Bill Clinton.

The President in his budget eliminates the roughly $37 billion in tax breaks for the oil and gas industry and rightly so. That industry has been getting tax breaks for over 40 years, has not produced one extra barrel of oil or made the country less dependent on foreign oil. In fact the U.S. import of oil has been at its highest level according to oil man Boone Pickens. One should also remember Mr. Pickens said gasoline should be $4.00 gallon.

The budget says $1.12 trillion of income will come from individual income taxes. That is more than 43%. Corporate income taxes will only contribute $270 billion in income. Once again corporate America gets a free ride because of all their tax breaks and exemptions. The budget will also let the Bush era tax cuts for families and corporations earning more than $250,00.00 expire. A three year freeze on some expenses is also in the budget. It is ironic that corporate America gives out bonuses to its executives that almost equal their tax burden. Which means the $270 billion that they pay in corporate taxes is not a burden at all. The individual income tax numbers in the budget explains in simple terms how wealth has be transferred from the average citizen to the wealthy.

The reason the country did so well during the Clinton administration was the many tax breaks given to individuals and families that allowed them to have some extra money to spend which propelled the economy. Tax breaks to corporate America does nothing to encourage the people to spend money and in fact is a reason why corporate bonuses are so out of line. The democratic party needs to push hard and pass the Presidents budget and keep the country on track to reverse the deficit spending of the past. There are other proposals in the budget that will help put America to work that will go a long way in reducing future deficits.