The US budget deficit for the current year will be about four times that of last year, reflecting government spending to ease the deep recession. The huge increase could hinder US President Barack Obama’s hopes of reforming health care, energy and education.
The deficit reflects government spending to bail out Wall Street and the banks, as well as Obama’s economic stimulus bill.
Obama, while acknowledging his reforms will cost large chunks of money, defends the deficit on the grounds that he inherited a massive amount of red ink from the previous administration.
The deficit is now forecast to climb by US$89 billion to US$1.84 trillion in the fiscal year that ends on Sept. 30, meaning the government will be borrowing US$0.46 for every US$1 needed to run the government under the Obama administration’s plan.
In one of the few positive signs to emerge in the period of deep global recession, the actual 2009 deficit was likely to be US$250 billion less than predicted because Congress is unlikely to provide another US$250 billion in financial bailout money.
Meanwhile, the White House proposed on Monday to raise nearly US$60 billion by closing tax loopholes including those related to the estate tax. It also revived a bid to cap deductions wealthy individuals can claim.
Funds raised from the estate tax and other changes would beef up a reserve fund of US$634 billion that Obama wants to use to revamp health care and expand insurance to tens of millions of Americans who lack it.
The proposals “take on what we believe are a series of unjustifiable loopholes, unjustifiable tax breaks that we simply can not afford,” said a senior administration official who could not be identified under the ground rules of a briefing for reporters.
BREAKING RECORDS: Kuo Hsing-chun’s snatch, clean and jerk, and combined lifts were all Olympic records, although well off her combined world record Taiwanese weightlifter Kuo Hsing-chun (郭婞淳) yesterday completed her elusive quest for Olympic gold, clinching Taiwan’s first win at the Tokyo Games as she set Olympic records in the women’s under-59kg weight class. Kuo, who has not lost a major competition in her weight class since the 2016 Olympics in Rio de Janeiro, where she was hampered by injury and finished third, finally chased down the gold medal that had long remained just out of her grasp. The 27-year-old finished with a combined lift of 236kg — 103kg in the snatch and 133kg in the clean and jerk — 21kg more
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