Get ready for some more bad economic news today. The Obama administration is expected to increase its estimate of the federal deficit over the next ten years by $2 Trillion, a move that will stir political debate and create more economic uncertainty.

The White House’s Office of Management and Budget is expected to forecast $9 trillion in deficits over the next decade, up from a $7 trillion estimate earlier this year.  The increase is largely due to lower-than-expected tax revenues as a result of the recession.

This tax revenue decrease, combined with federal spending on the bank bailout ($700 billion) and the Obama stimulus package ($787 billion) are the main reasons for the enormous deficit.

But government spending is expected to continue with more than $100 billion on unemployment compensation this year.  And if Obama’s proposal to provide health care coverage for more than 47 million uninsured Americans is approved, expect another $1
Trillion over the next 10 years.
sources: google.com, Associated Press, Wall Street Journal

The agreement on the Obama Stimulus Plan makes Barack Obama the first president to ever have such a significant economic stimulus package passed by both Houses in such a short period of time. It is the biggest economic relief package since FDR’s “New Deal”. But what does it mean to the average American?

The almost $800 billion stimulus package means that lower and middle-income taxpayers will get an extra $13 a week in their paycheck this year and about $8 more a week next year. Unemployment checks will go up $25 a week and will keep coming even longer. There are thousands of dollars of tax breaks for new home buyers and people buying new cars. Food stamp benefits will rise for 30 million Americans and short-term health insurance will become more affordable for many losing their jobs.

Obama’s economic stimulus package breaks down to $280.8 billion in tax cuts, $308.5 billion in discretionary spending and $198 billion in Direct Spending. Here’s how that breaks down:

Tax Cuts

• $280.8 Billion

Discretionary Spending

• $61.1 billion in Transportation, Housing/Urban Development
• $53.6 billion in State and local school grants
• $50.8 billion in Energy and Water
• $43.9 billion in Education
• $26.4 billion in Agriculture
• $25.8 billion in Depts of Labor and Health and Human Services
• $10.5 billion in Environment
• $36.4 billion in Other spending

Direct Spending

• $90 billion in Medicaid
• $57.3 billion in unemployment, compensation and other programs
• $25.1 billion in Cobra subsidies
• $20.8 billion in Health information technology
• $4.8 billion in other spending

Many in Washington are heralding this stimulus package as a sure winner for America. But the ugly truth about the Obama stimulus plan is that the average American had to take it on the chin in order for the stimulus package to pass. The original plan called for a $15,000 tax credit to first time homebuyers - that was cut from plan. Buyers can still get up to $8,000 tax credit - but it’s really a tax-free loan to be paid back by the home buyer over 15 years. And any potential tax savings on reducting car loan interest from your income tax was also slashed from the stimulus package.

Pork barrel spending is also stuffed into this stimulus packages. Senate Majority Leader Harry Reid (D-Nevada) was able to allocate a big chunk of the $8 billion to construct high-speed rail lines could go to a Los Angeles to Las Vegas route. And Arlen Specter (R -Pennsylvania) make sure $10 billion was set aside for one of his priorities, the National Institutes of Health.

While the deal-making was going on, the Republicans fought for tax cuts while the Democrats wanted spending. You know who won - Nancy Pelosi and the Democrats.

So in a nutshell, the celebrated Obama stimulus package does little for the average American. You think that $13 more dollars a week is going to make a difference to the average American? This will help spread the gap between the haves and the have-nots in America.

This is NOT a stimulus package, instead, it’s a stability package to keep America from going into Depression - that’s right Depression!

Where are all the new jobs coming from? And what about the bill that our children will have to pay?

It’s typical politics - nothing has changed in Washington - and probably never will.