By Pamela Gentry, Senior Political Analyst

Feb. 26, 2009 – President Barack Obama outlined his first budget for the nation’s ailing economy, targeting cuts to wasteful spending on health care and raising taxes on the wealthy. The plan calls for spending $3.55 trillion in 2010 as well as adding $3.9 trillion in spending to the 2009 budget.

“Having inherited a trillion-dollar deficit that will take a long time for us to close, we need to focus on what we need to move the economy forward, not on what’s nice to have,” Obama said during his opening remarks.

So, how will the president’s budget impact you?

Obama’s proposed budget lays out a plan for overhauling one of the largest entitlement programs: Medicare. He isn’t looking to balance the budget this year, but he would allow the tax cuts from the Bush years to expire (on those making more than $250,000), and cut taxes for the middle class (those making less than $250.000).

That means the $400.00 (if you’re single) or the $800.00 (for couples) designated as the middle class tax cut in the stimulus package would become permanent. The budget also calls for expanding existing tax credits for college students and the child tax credit.

Black lawmakers met with the president Thursday afternoon at the White House and told reporters it was “a very open meeting.”  Rep. Barbara Lee, (D-Calif.) told reporters after the closed door meeting that they discussed “how we move forward.” 

“The president is a former member of the Congressional Black Caucus and we’ve been working with the president on our priorities and those for all Americans.”

But health care is the biggie.  The president is looking at getting huge savings from Medicare and Medicaid and getting an estimated 48 million uninsured folks insured.  In the president’s budget he would set aside $634 billion over the next 10 years to get the job done.

Obama told those gathered, “As we develop a full budget that will come out this spring, we’re going to go through our books page by page, line by line, to eliminate waste and inefficiency. This is a process that will take some time, but in the last 30 days alone, we have already identified $2 trillion in deficit reductions that will help us cut our deficit in half by the end of my first term.”

The rest of the money would come from cuts in Medicare across the board.  Insurance plans, hospitals, nursing homes and drug companies would face cuts because all health care contracting would be open for competitive bidding.  Something these programs don’t do now.  If Congress allows this, it could result in substantial savings and drive some costs down.

This strategy won’t sit well with his Republican critics and fiscally conservative Democrats.  They may agree with his plan to pay for health care with savings rather than adding it to the budget woes, but they may not come on board with what they consider tax hikes.

Now we’ll have to see what Congress does with the president’s budget. 

TAGS: budget 2010, Congressional Black Caucus, Medicaid, Medicare

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