Another $750 billion in aid to the financial system and $635 billion in spending on an overhaul of the U.S. health care system will bring the budget deficit to an unprecedented $1.75 trillion by September 30, 2009, according to U.S. President Barack Obama's budget proposal.
The ambitious proposal, which goes to Congress on Thursday, would bring budget spending to 12% of GDP, and will be partially funded by tax increases for families earning more than $250,000 per year, as well as tax increases on hedge fund managers.
The budget also plans to cut the budget deficit in half over the next four years.
The document does not clearly indicate whether the President believes all of the additional spending allotted to the banking system will be needed.
The Obama plan also includes a $635 billion spending bill for updating the U.S. health care system and a $75 billion spending bill on defence.
By Erik Kevin Franco and edited by Stephen Huebl
©CEP News Ltd. 2009