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Higher taxes on rich and war bill cut in Obama's first budget which will be 'sober and honest'
Paul Thompson in Miami23 Feb 2009
PRESIDENT OBAMA is preparing to unveil his first budget this week as he seeks to put the American economy back on track with a $787million stimulus package.
He is widely expected to increase taxes for the rich and slash spending on private defence contractors.
Mr Obama will also announce a series of energy and trade measures aimed at tackling climate change.
"The President believes there are essentially three areas that have to move forward even as we pare back elsewhere - health care, energy and education," said David Axelrod, his senior adviser. "These are the bulwark of a strong economy." Aides said the President wants to reduce the US budget deficit by half by the end of his first term. He has vowed to cut it from $1.3trillion to $533billion by 2013 with a series of tax increases and spending cuts.
Part of the savings, estimated at $90billion a year, will come from ending the war in Iraq.
In his weekly radio address, Mr Obama said his first budget was "sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don't, and restoring fiscal discipline. We can't generate sustained growth without getting our deficits under control". The President has set his sights on Wall Street and its executives and intends to tax the income on hedge funds. Republicans had opposed such a measure, but with Wall Street's greed blamed for the economic crisis, it is not thought Mr Obama will have any trouble pushing the measure through.
Tax increases for anyone who earns over $250,000 will also be implemented. The budget, which will be unveiled on Thursday, was preceded by a "fiscal responsibility summit" at the White House today involving Republican and Democrat politicians, unions and business leaders.
