US President Barack Obama on Thursday sent to Congress a budget which foresees a record-high deficit of 1.75 trillion dollars for this fiscal year and calls for 3.55 trillion dollars in spending in fiscal year 2010 beginning on Oct. 1.
Obama's budget entails massive spending to pull the nation out of recession, and leaves open the possibility he will need an additional 750 billion dollars in bailout money.
But analysts believe the massive budget, which Obama calls as "an honest accounting", is likely to set off a war of words in Congress for it contains too many difficult-to-digest ideas.
Honest accounting
The huge deficit figure will represent 12.3 percent of the US economy, the largest share since World War II.
"In keeping with my commitment to make our government more open and transparent, this budget is an honest accounting of where we are and where we intend to go," Obama said before releasing the budget.
The 134-page budget also sets aside a 634 billion dollar "reserve fund" as a down payment to cover roughly two-thirds of the anticipated 10-year cost of the universal health care program, projected at 1 trillion dollars.
According to the budget, a tax cut for the middle class enacted in the recent stimulus package will be made permanent.
That will extend a 400-dollar tax credit for most workers, and 800 dollars for couples, while it expires President George W. Bush's tax cuts for couples making more than 250,000 dollars a year.
It will raise the top income tax bracket from 35 percent to 39.6 percent for those taxpayers and raise their capital gains rate from 15 to 20 percent as well.
The budget also seeks 177 billion dollars in savings over 10 years by reducing government subsidies to Medicare Advantage, the private-sector insurance component of Medicare.
Under Medicare Advantage, private insurers provide government-approved health insurance coverage and are reimbursed for costs on an annually adjusted basis.
Obama's budget also includes hundreds of billions of dollars in revenues starting in 2012 and spread out over many years from a greenhouse gas emissions trading system.