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The following article was published in our article directory on February 15, 2011.
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Article Category: Business
Author Name: Amanda xzh
U.S. federal deficit in fiscal year 2011 is expected to top historic high level of 1.645 trillion dollars, despite the Obama administration's constant pledge to cut spending, according to the U.S. government's 2012 budget proposal released on Monday.
In a 3.73-trillion-dollar budget that President Barack Obama sent Congress for fiscal year 2012 beginning from October 1, the government outlined its plan to trim spending, but the projected deficits in current and next fiscal year remain high.
The budget shortfall in 2011 would equal an unsustainable 10.9 percent of the gross domestic product (GDP), the basic measure of a country's overall economic output.
The proposal also projects that the budget red ink in 2012 will fall to 1.101 trillion dollars. It will be the fourth year in a row that the U.S. fiscal deficit surpasses 1-trillion-dollar mark.
In 2010, the U.S. budget deficit hit 1.29 trillion dollars after it recorded 1.42 trillion dollars in 2009.
To address widespread public fear toward the ballooning deficit, the Obama administration has pledged to cut the deficit by 1.1 trillion dollars over the next 10 years.
Obama plans to trim the deficit as a share of the U.S. economy to 3.2 percent by 2015. He pledged to his Group of 20 partners to halve the deficit by 2013.
In 2012, Obama plans to trim 90 billion dollars from government spending, while dramatically boosting tax revenues, senior administration officials said.
Administration officials said that two-thirds of the deficit reduction would come from lower spending, including a five-year freeze on programs unrelated to national security and defense that would save 400 billion dollars through 2021.
The other one-third of savings would come from tax increases.
"These are tough choices. I think this budget will withstand the test that we live within our means," White House budget chief Jack Lew told local media.
Since last year's budget, the fiscal position has worsened, partly because of the tax-cut compromise passed by the lame-duck Congress in December.
Fears are growing that the inability of the United States to get its budget under control could eventually lead to a debt crisis.
In a speech delivered at a middle school in Maryland, Obama stressed that his fiscal 2012 budget was a "downpayment" on what was needed to get the United States on a strong fiscal path, saying Democrats and Republicans must work together to do more.
But the Republicans are not satisfied with the Obama administration's budget reduction plan.
"We're broke," House Speaker John Boehner said Sunday on NBC's "Meet the Press." He criticized that the Obama administration's budget is not winning the future, but spending the future.
"Americans don't want a spending freeze at unsustainable levels, " said Senate Republican Leader Mitch McConnell. "They want cuts, dramatic cuts."
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