Changes

===Background===

===Background===

Following the [[Recession of 2008]] Obama declared that failure to pass his [[Economic stimulus]]  would turn a "crisis into a catastrophe," and promised [[Unemployment]] would not rise above 7.8%.<ref>[http://www.time.com/time/business/article/0,8599,1910208,00.html Obama's Stimulus Plan: Failing by Its Own Measure,]  Stephen Gandel, ''TIME'',  July 14, 2009.</ref><ref>[http://www.msnbc.msn.com/id/31165217/ Obama promises economic relief this summer], AP, 6/8/2009.</ref> The House on Jan. 28 passed a stimulus package‎ of $819 billion in new spending and tax increases, despite unanimous Republican opposition. A revised bill passed the Senate with three Republican votes. A compromise bill known as the "[[American Recovery and Reinvestment Act of 2009]]" was passed, providing for $789 billion in new spending and stimulus.

Following the [[Recession of 2008]] Obama declared that failure to pass his [[Economic stimulus]]  would turn a "crisis into a catastrophe," and promised [[Unemployment]] would not rise above 7.8%.<ref>[http://www.time.com/time/business/article/0,8599,1910208,00.html Obama's Stimulus Plan: Failing by Its Own Measure,]  Stephen Gandel, ''TIME'',  July 14, 2009.</ref><ref>[http://www.msnbc.msn.com/id/31165217/ Obama promises economic relief this summer], AP, 6/8/2009.</ref> The House on Jan. 28 passed a stimulus package‎ of $819 billion in [[Direct_spending#New_spending|new spending]] and tax increases, despite unanimous Republican opposition. A revised bill passed the Senate with three Republican votes. A compromise bill known as the "[[American Recovery and Reinvestment Act of 2009]]" was passed, providing for $789 billion in new spending and stimulus.

Detroit spread gloom on Feb. 17 as GM starkly warned of impending bankruptcy unless it gets more aid. By August, both Chrysler and GM had entered bankruptcy, and come out again in much smaller size, as they closed a fourth of their dealerships, slashed wage rates, and repaid creditors with 29 cents on the dollar.  The government gave Chrysler away free to Fiat of Italy, which acquired ownership without investing any money. Meanwhile the part makers, which employ more workers than the Big Three automakers, verged on disaster and begged for billions.  The "[[cash for clunkers]]" proved to be a boondoggle for the rich at a cost of $3 billion to the Treasury.

Detroit spread gloom on Feb. 17 as GM starkly warned of impending bankruptcy unless it gets more aid. By August, both Chrysler and GM had entered bankruptcy, and come out again in much smaller size, as they closed a fourth of their dealerships, slashed wage rates, and repaid creditors with 29 cents on the dollar.  The government gave Chrysler away free to Fiat of Italy, which acquired ownership without investing any money. Meanwhile the part makers, which employ more workers than the Big Three automakers, verged on disaster and begged for billions.  The "[[cash for clunkers]]" proved to be a boondoggle for the rich at a cost of $3 billion to the Treasury.

==== FY 2010 Budget ====

==== FY 2010 Budget ====

[[Image:Budget-cbo.jpg|thumb|250px|left]]

[[Image:Budget-cbo.jpg|thumb|250px|left]]

The Democratic controlled Congress by a party line vote in late April passed the  budget Obama proposed in late February. It called for $3.4 trillion in new spending, not counting the $787 billion in stimulus spending approved in February, nor the trillions in loan guarantees to banks.  The 2010 budget allocated $1.2 trillion for defense, and an additional $130 billion for the wars in Afghanistan and Iraq. Nondefense spending increased by 8% or $40 billion. The budget allowed the Obama health plan, which had not yet been written, to move through Congress on a fast track with no risk of filibuster.  

The Democratic controlled Congress by a party line vote in late April passed the  budget Obama proposed in late February. It called for $3.4 trillion in [[Direct_spending#New_spending|new spending]], not counting the $787 billion in stimulus spending approved in February, nor the trillions in loan guarantees to banks.  The 2010 budget allocated $1.2 trillion for defense, and an additional $130 billion for the wars in Afghanistan and Iraq. Nondefense spending increased by 8% or $40 billion. The budget allowed the Obama health plan, which had not yet been written, to move through Congress on a fast track with no risk of filibuster.  

The Tax Foundation says that 44% of all tax filers have no tax liability and most of those will get a check from the government, especially from the Earned Income Tax Credit (EITC)<ref> EITC is a conservative idea first proposed by Milton Friedman, enacted under Republican presidents Ford and Reagan.</ref> and credits for college tuition and child care. The ''Wall Street Journal'' noted about Obama's plan that, "Once upon a time we called this 'welfare'". <ref>http://online.wsj.com/article/SB122385651698727257.html</ref>

The Tax Foundation says that 44% of all tax filers have no tax liability and most of those will get a check from the government, especially from the Earned Income Tax Credit (EITC)<ref> EITC is a conservative idea first proposed by Milton Friedman, enacted under Republican presidents Ford and Reagan.</ref> and credits for college tuition and child care. The ''Wall Street Journal'' noted about Obama's plan that, "Once upon a time we called this 'welfare'". <ref>http://online.wsj.com/article/SB122385651698727257.html</ref>

The chairman of the Senate Budget Committee was conservative Democrat [[Kent Conrad]] of [[North Dakota]], a deficit hawk who said he was "very uncomfortable with the build-up of debt" and urged Obama to make good on his promise to overhaul federal retirement and health-care programs. Conrad called for "more discipline on the spending side."<ref> [http://www.washingtonpost.com/wp-dyn/content/article/2009/02/28/AR2009022801960.html?hpid=topnews ''Washington Post'' Mar. 1, 2009]</ref>

The chairman of the Senate Budget Committee was conservative Democrat [[Kent Conrad]] of [[North Dakota]], a deficit hawk who said he was "very uncomfortable with the build-up of debt" and urged Obama to make good on his promise to overhaul federal retirement and health-care programs. Conrad called for "more discipline on the spending side."<ref> [http://www.washingtonpost.com/wp-dyn/content/article/2009/02/28/AR2009022801960.html?hpid=topnews ''Washington Post'' Mar. 1, 2009]</ref>

The Obama Administration based its domestic policies on the assumption of a rapid economic recovery generating the tax revenue needed to fund permanent new spending program for [[Obamacare]] and "greening the economy".  Administration forecasts were more starry-eyed than private sector forecasts. Both parties agree that stimulus spending is needed to deal with the recession but Congress is unlikely to approve permanent new spending programs unless the economy improves, since a large number of conservative Democrats were elected who may vote with Republicans to keep down spending and deficits.<ref> Peter S. Goodman, "Sharper Downturn Clouds Obama Spending Plans," [http://www.nytimes.com/2009/02/28/business/economy/28recession.html?_r=1&th&emc=th  ''Washington Post'' Feb. 27, 2009]</ref>

The Obama Administration based its domestic policies on the assumption of a rapid economic recovery generating the tax revenue needed to fund [[Direct spendingpermanent new spending]] program for [[Obamacare]] and "greening the economy".  Administration forecasts were more starry-eyed than private sector forecasts. Both parties agree that stimulus spending is needed to deal with the recession but Congress is unlikely to approve permanent new spending programs unless the economy improves, since a large number of conservative Democrats were elected who may vote with Republicans to keep down spending and deficits.<ref> Peter S. Goodman, "Sharper Downturn Clouds Obama Spending Plans," [http://www.nytimes.com/2009/02/28/business/economy/28recession.html?_r=1&th&emc=th  ''Washington Post'' Feb. 27, 2009]</ref>

==== FY 2011 Budget ====

==== FY 2011 Budget ====