On Monday, the Obama administration is expected to release its second major policy proposal with regard to cultivating economic recovery. This proposal will focus solely on budgetary details for fiscal year 2012. The plan is expected to detail a $1.1 trillion spending reduction over the next decade. With the limited details that have been revealed about the spending reduction plan, Republicans have already begun to criticize the cuts as not being ambitious enough to seriously address deficit reduction and the enduring fiscal woes the country is facing.
Republican leadership has been clear that they will propose the full $100 billion in spending cuts as promised during Midterm Election campaigns. While the White House has reserved comment on the Republican plan, it is notable that the deficit for 2011 is projected to hit $1.5 trillion alone, and the Congressional Budget Office (CBO) has indicated that over the next 10 years deficits could reach over $12 trillion. CBO Director Douglas Elmendorf went before a congressional committee last month reiterating these details, and stated that if serious cuts were not implemented, the national debt could reach almost 100 percent of the GDP.
Obama’s major suggestion has centered on implementing a five-year domestic spending freeze that is projected to save $400 billion over the next 10 years. The rest of the deficit reduction plan depends on revenue increases, largely based on restricting itemized tax deductions for the wealthy.
Representative Paul Ryan, Republican Congressman and Chairman of the House Budget Committee, has noted that the budget proposed by the Obama administration is weak on spending discipline. While cuts are made in some areas, Obama has advocated increased spending in education, infrastructure, science and research that he has suggested are key to increasing American competitiveness in the global marketplace. Representative Paul Ryan has stated that the debt will continue to rise under the budget proposed.
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