Budget Cuts

“President Barack Obama will propose a $3.8 trillion budget for fiscal 2011 that foresees the deficit hitting a record $1.6 trillion in the current fiscal year but falling to about $700 billion, or 4% of the gross domestic product, by the end of his term in 2013. But to meet his promise of getting the deficit down even further, to 3% by 2015, the president will rely on a bipartisan debt commission to recommend what steps to take, according to budget analysts briefed on the proposal. The president is expected to issue an executive order establishing the commission as part of the budget he is set to unveil Monday. The deficit hit a record $1.4 trillion in the last fiscal year. With unemployment still at 10%, the president is finding it difficult to meet his promise to cut the $1.3 trillion deficit he inherited in half by 2013. The 2010 budget foresees the deficit falling to 5% of GDP—or about $830 billion by the Congressional Budget Office’s new economic forecast—by 2013 through economic growth alone. Policy changes, such as a proposed freeze in nonsecurity, domestic spending, would shave an additional percentage point.”