Yesterday, President Barack Obama unveiled U.S. budget for 2012, which includes more than a $1 trillion of provisions geared towards reducing America’s deficit to just 3% of the economy by the middle of the decade.
President Obama laid out the foundation for a budget overhaul that includes a five-year discretionary spending freeze that can reduce the federal deficit by $400 billion over the next decade. Here are just some of the areas that will be directly affected by Obama’s budget:
- Military spending: $78 billion will be cut from the military budget over the next five years, savings realized by cutting weapons programs, bringing troops home from Iraq.
- Health care: $62 billion will be invested into the healthcare system to reimburse doctors in the Medicare system to prevent a 30% cut in those reimbursements
- Tax Reform: Paying for the Alternative Minimum Tax patch by limiting the amount those in the highest tax bracket can receive for itemized deductions, which is expected to reduce the deficit by 1% of the GDP by the end of the decade; and, simplifying the corporate tax system, eliminating special interest loopholes and lowering the corporate tax rate for the first time in 25 years
- Innovation: Expanding the research and development tax credit, making $148 billion in R&D investments and supporting a clean energy economy. The budget also would eliminate 12 tax credits to oil, gas and coal companies, raising $46 billion over ten years
- Infrastructure: $35 billion a year would be invested into improving the country’s transportation systems.
The New York Times offers a great visual tool you can use to track how U.S. federal agencies will be affected by the new budget. You can also click here to read a message from the President Obama regarding his proposed budget, and check out the video below for words on the budget from Office of Management and Budget director Jacob Lew.
How effective do you think Obama’s proposed 2012 budget will be if approved by Congress? Let us know in the comments section.