Obama's Optimistic Economic Recovery Budget Plan

We have reported about Obama's Economic Recovery plan in the past. Here is a breakdown of what it entails.

Basically, he wants to start decreasing debt by spending more money. It goes without saying that many people have a problem with this theory. Congressional Republicans in particular have been tearing this plan to pieces claiming that spending money we don't have is not the way to help the economy recover.

First of all, the President has very optimistic hopes for the economy. In a proposed budget plan, he expects to cut $4 trillion out of the country's deficit over the next ten years. The deficit would fall to $901 billion in 2013 and then $575 billion by 2018. However, in order to achieve this lofty goal, the administration wants to raise spending on programs that will supposedly kick-start the recovery process. The main focus is to build a "solid foundation of educating, innovating, and building," according to the administration.

This involves the following spending:

• $476 billion for transportation projects such as inner-city rail services
• $30 billion to modernize some 35,000 schools
• $30 billion to help states hire more teachers, police, rescue workers and firefighters
• Potentially $8 billion more for businesses and community colleges to train more workers in high-growth industries

According to a poll taken, however, most people do not care about lowering the deficit. Americans are more concerned with job growth. The White House is actually predicting that job growth will remain weaker than normal for the next several years, but they are optimistic that unemployment rates will fall below 6 percent by 2017.

Additionally, the budget does not include anything regarding revising the tax code. It is widely acknowledged and accepted that fundamental tax reform is vital, but the President continues to side-step the issue by leaving it out of budget proposals. Despite this, with former President Bush's tax cuts expiring this year, President Obama may have a chance to oversee one of the biggest changes to the tax code in nearly a decade. He will be able to either raise taxes by doing nothing, or he could issue a veto to extend them.

Do you think it would be smart for the President to raise taxes to help balance his budget plan? What would this do regarding the deficit problem? Leave your thoughts below!

Posted in: budget plan,deficit,economic recovery,obama,spending