President Obama’’s 2012 Budget Estimates $1.1 trillion Deficit

The U.S. Government faces some major budget challenges. President Obama unveiled his fiscal year 2012 budget today and will present it to Congress.

by Wesley Fox

The U.S. Government faces some major budget challenges.  President Obama unveiled his fiscal year 2012 budget today and will present it to Congress.  The budget includes over $3.7 trillion in total spending, some tax increases, and will run a deficit of roughly $1.1 trillion.  The deficit will increase the national debt to over $16.6 trillion!  The President has proposed some cuts but the overall budget is only $90 billion (2.3 percent) less than the previous year.  Some Republicans have criticized the proposal, pointing out that it fails to address the nation’s structural deficit.

Newly-elected Governor Rick Scott of Florida took a different approach to his state’s budget problems.  Since States cannot print money like the U.S. Government, Governor Scott focused on cutting spending.  According to the Florida Times-Union, Governor Scott’s plan cuts state spending by $7.1 billion – more than 10 percent.  The plan does not rely on borrowing or tax increases to close the state’s budget shortfall.

Illinois faces some major budget challenges as well.  It has a projected $15 billion budget shortfall and, according to Investment News, has had to borrow billions over the years to make pension payments and pay bills.  As a result, Illinois has the second-lowest bond rating among all fifty states.  Governor Quinn also supported the recent income and corporate tax increase.

Illinois must enact a budget that is fiscally responsible and sustainable.  Governor Quinn makes his budget address on Wednesday.  Will he follow Governor Scott’s example and cut state spending to balance the budget?  Or will he follow President Obama’s example of excessive borrowing and tax increases?