President Obama announces a budget plan which, despite cuts in some programmes, will see the US deficit rising to record levels.
The budget includes about $100bn of tax incentives designed to lower double-digit unemployment, including inducements for companies to hire workers.This will be partially offset by higher taxes on wealthy Americans earning more than $250,000 a year.The budget also includes more money for education, scientific research and defence programmes.
'Quagmire' of debt
But Obama also plans an overall three-year freeze on the portion of government spending that excludes commitments on welfare benefits, healthcare for the elderly, defence and homeland security.And he cancelled the Constellation programme launched by his predecessor that envisaged putting astronauts on the Moon's surface by 2020.In his federal budget request, Obama described the project as "over budget, behind schedule, and lacking in innovation", adding that it was draining resources from other Nasa activities.
Republicans also attacked Obama's proposed tax increases and said the large projected deficits showed he had failed to get government spending under control.Senator Judd Gregg, the top Republican on the Senate Budget Committee, said the US was sinking into a "quagmire" of debt and that Mr Obama's stimulus plan had failed to create jobs.
*Link:http://www.cnn.com/2010/POLITICS/02/01/obama.budget.explainer/index.html
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