Proposed Budget Reserves $250 Billion for Banks

President Barack Obama on Thursday submitted to Congress his proposed 2010 fiscal year budget, a sweeping government spending plan that will cost $3.6 trillion over the next decade, will run a $1.75 trillion deficit and would reserve $250 billion for additional effort to stabilize the banking system. The budget includes the cost of war in Afghanistan in a move the President and administration officials have repeatedly touted as a new era of transparency and honesty. “…[W]hile our budget will run deficits, we must begin the process of making the tough choices necessary to restore fiscal discipline, cut the deficit in half by the end of my first term in office, and put our nation on sound fiscal footing,” Obama said Thursday in his remarks on the budget. The budget identifies $2 trillion in deficit reduction, nearly $1 trillion in reduced spending and nearly $1 trillion in added revenue compared with the current budget plan, according to the Office of Management and Budget director Peter Orszag. “We’re inheriting a cumulative deficit over the next decade of $9 trillion,” Orszag said Thursday at a press briefing on the budget. It proposes $150 billion in energy efficiency investments, to be funded in $15 billion increments over 10 years. It proposes a $634 billion health care “down payment” also funded over the next decade. It provides $533.7 billion for the Department of Defense — a 4 percent increase over 2009 — and $4.5 billion in funding for the Community Development Block Grant program. The budget also includes a $250 billion reserve that would support $750 billion in asset purchases and fund future efforts to stabilize the financial system. “The existence of this reserve in the budget does not represent a specific request,” the report on the budget reads, in part. “Rather as events warrant, the administration will work with the Congress to determine the appropriate size and shape of such efforts, and as more information becomes available the administration will define an estimate of potential costs.” Download the full budget proposal. Write to Diana Golobay at diana.golobay@housingwire.com.