Reuters previews the budget that Obama will unveil today. "President Barack Obama will forecast a 2009 deficit of $1.75 trillion in a budget proposal on Thursday that sets goals of overhauling the healthcare system and shoring up the U.S. economy. The huge deficit would represent 12.3 percent of U.S. gross domestic product -- the largest share since World War II. Two senior administration officials … said Obama's expensive policy goals would be offset by cuts to put the country in better fiscal shape."
Bloomberg says the budget request "would provide as much as $750 billion in new aid to the financial industry." An administration official "said the White House hasn't decided whether the $750 billion in additional aid to the financial industry will be needed. He said it will be put in the budget as 'placeholder.' The official said the aid would appear in the budget as about $250 billion because the rules require policymakers to record the plan's net cost to taxpayers. The government anticipates it would eventually recoup some, though not all, of the money expended to help financial companies."
Also in his budget, the Washington Post reports, Obama "is proposing to begin a vast expansion of the U.S. health-care system by creating a $634 billion reserve fund over the next decade, launching an overhaul that most experts project will ultimately cost at least $1 trillion. The "reserve fund" in the budget proposal being released today is Obama's attempt to demonstrate how the country could extend health insurance to millions more Americans and at the same time begin to control escalating medical bills that threaten the solvency of families, businesses and the government."
To help finance this reserve health-care fund, the New York Times says the Obama administration proposes calling "for stricter limits on the benefits of itemized deductions taken by the wealthiest households… Administration officials said Mr. Obama would propose to reduce the value of itemized tax deductions for everyone in the top income tax bracket, 35 percent, and many of those in the 33 percent bracket — roughly speaking, starting at $250,000 in annual income for a married couple."
More: "Under existing law, the tax benefit of itemizing deductions rises with a taxpayer's marginal tax bracket (the bracket that applies to the last dollar of income). For example, $10,000 in itemized deductions reduces tax liability by $3,500 for someone in the 35 percent bracket. Mr. Obama would allow a saving of only $2,800 — as if the person were in the 28 percent bracket. The White House says it is unfair for high-income people to get a bigger tax break than middle-income people for claiming the same deductions or making the same charitable contributions."
RNC spokesman Alex Conant points out to First Read that on Obama's transition site, the president "said he would pay for health care by 'rolling back the Bush tax cuts for Americans earning more than $250,000 per year and retaining the estate tax at its 2009 level.' Now we know that is not true. He is paying for it with a NEW tax."