It would average 4.5 per cent of the economy over the next decade, a level that economists consider a threat to long-term economic growth.
In an effort to address the deficit, the president’s budget would institute a three-year budget freeze on a variety of programmes outside of the military and homeland security as well as increasing taxes on energy producers and families earning more than $250,000.
Obama also said it was now time for Americans of different political persuasions “to
come together” to solve the problem.
“Because we’ve heard plenty of talk and a lot of yelling on TV about deficits, it’s now time to come together and make the painful choices we need to eliminate those deficits,” he said in a weekly radio address.
Obama also said that he wanted the government to impose a freeze on many discretionary spending programmes that do not affect job creation, middle class tax cuts as well as Medicare, Medicaid, and Social Security – programmes that serve retirees and poor people.
The president also stressed the need to create a bi-partisan fiscal commission – a panel of Democrats and Republicans who would sit down and figure out concrete deficit-reduction proposals.
After a long battle on Obama’s healthcare reform dominated his first year in office and led to a string of Democrats election defeats, the administration is hoping that its new budget will convince US residents that Obama is focused on fixing the economy.