Obama budget foresees deficits for a decade

WASHINGTON — President Barack Obama today will propose a 2011 federal budget that would spend $1.3 trillion more than the government takes in — then continue with deficits of more than $700 billion a year for at least a decade. He promised an independent commission would step in later.

His plan would spend $3.8 trillion in the federal fiscal year beginning Oct. 1, a 3 percent increase over the current year. The budget foresees the government taking in $2.6 trillion in taxes and other revenue, an 18 percent jump as the deep recession ends and a growing economy presumably boosts income

The budget also would extend temporary Bush-era tax cuts for those making less than $250,000, now scheduled to expire on Dec. 31, and the Making America Work tax cut enacted last year as a recession fighter.

Tax cuts for those making more than $250,000 would be allowed to expire, however.

Obama's other proposals include tax cuts for small business, including a cut to encourage small businesses to hire new employees and pay existing employees more, and the elimination of the capital gains tax for new investments in small business.

The budget for the 2011 fiscal year, which begins in October, will identify the winners and losers behind Obama's proposal for a three-year freeze of a portion of the budget. Many programs at the National Institutes of Health, the National Science Foundation and the Energy Department are in line for increases, along with the Census Bureau.

Among the losers would be some public works projects of the Army Corps of Engineers, two historic preservation programs and NASA's mission to return to the Moon, which would be ended as the administration seeks to reorient the space program to use private companies for launchings.

Exempted from the cuts, however, are national security, veterans programs, Medicare, Medicaid and Social Security — the most expensive and fastest-growing areas of the budget.

On the spending side, the proposal includes:

 $33 billion for the current year and $159 billion next year for the wars in Afghanistan and Pakistan.

 $43.6 billion for Homeland Security, a 2 percent increase, including money for 1,000 new Advanced Imaging Technology machines for airport passengers, new explosives detection equipment for baggage and more federal marshals aboard international flights.

 a 20 percent increase for the Department of Veterans Affairs.