Obama budget to rescue economy, expand healthcare

WASHINGTON: President Barack Obama’s budget this week will set out big goals: to rescue the economy from freefall, expand US healthcare coverage and move within a few years to slash huge deficits.

The budget, due out on Thursday, will indicate Obama’s timeline for achieving many of the domestic priorities he pushed during the campaign.

Sources familiar with the administration’s thinking have said the blueprint will reflect Obama’s interest in moving forward on a pledge to expand health care coverage to the 46 million Americans who lack it.

Health care will be an important theme all week, including in Obama’s address to a joint session of Congress on Tuesday night in which he will sketch out his major domestic and foreign policy goals.

Steps to tackle global climate change could also be incorporated in the budget for the 2010 fiscal year that begins on Oct 1.

At the same time, it will show the impact on the budget deficit of the recently passed US$787bil economic recovery package, the largest fiscal stimulus in history.

The stimulus is the centrepiece of initiatives Obama has put forth to jolt the economy out of a year-long recession.

As he rolls out the budget, one of Obama’s challenges will be to overcome skepticism about what he can achieve. Many doubt there is political will to tackle bold initiatives like healthcare reform while Washington grapples with the more immediate problems of the recession and the financial meltdown.

“All of these goals are extremely challenging,” said William Galston, a former domestic policy adviser to President Bill Clinton. “Universal health coverage and a major assault on climate change would have been a tough sell in the best of times, but these are the worst of times.”

There is already “sticker shock” at the cost of the stimulus and the US$700bil financial bailout. Galston, a professor at the University of Maryland, said “members of Congress are going to be more reluctant than they would have been otherwise to go along with big-ticket spending items.”

An administration official said Obama’s budget would show a reduction in the deficit to US$533bil by 2013.

Private economists project that the deficit will swell to US$1.5 trillion or higher in the 2009 fiscal year that ends Sept 30. That would be more than triple the US$455bil deficit recorded in 2008. – Reuters

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