U.S. administration source unveils Obama`s budget proposal
U.S. President Barack Obama`s budget proposal for 2011 to be released on Monday will predict a record $1.6 trillion budget deficit in the current fiscal year, a U.S. administration source has said.
The figure is higher than predicted by the Congressional Budget Office, which estimated the deficit to stand at $1.35 trillion. Both figures indicate that the deficit will reach a level not seen since WWII, when measured as a percentage of the economy.
The deficit figure for the 2011 fiscal year was put at $1.3 trillion. The fiscal year starts in the U.S. on October 1.
In his State of the Union address in late January, Obama pledged to dig the country out of a "massive fiscal hole."
The president`s $3.8 trillion budget plan includes a mix of tax cuts and spending to boost the country`s economy.
In particular, Obama will propose a three-year freeze on some domestic programs, a move intended to save some $20 billion in 2011 and $250 billion over the coming decade. The money saved is planned to be spent on education and science development projects. The freeze will not affect state defense and social insurance programs, as well as health plans.
The Obama administration will also propose the introduction of a tax for the U.S.`s largest banks intended to raise some $90 billion to partly compensate the losses the state suffered at the peak of the financial crisis.
White House spokesman Robert Gibbs said on Sunday the country`s government will spend some $100 billion in 2011 to fight unemployment, which has reached double digits in the U.S.
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