"Ending The Era Of Irresponsibility"

BUDGET TALKING POINTS

Ending the Era of Irresponsibility

· We've inherited a mess - the result of mistaken policies, misplaced priorities, and an era of profound irresponsibility. For too long, we have ignored the tough choices we needed to make and failed to address the big challenges our economy faces.

o This lack of responsibility has left us with an economy in recession and an untenable fiscal situation -- $1 trillion a year deficits on average over the coming decade.

· This irresponsibility ends right now. In this budget, we are being up-front and honest about the challenges we face - and are making the tough choices necessary to get our country back on track - asking every American to step up in the shared sacrifices we'll need to make.

o It starts with being honest about the problem. We are doing that, accounting for more than $250 billion a year in costs on things that other administrations used to hide with accounting tricks.

o We need to restore a sense of balance - investing in what works and cutting those programs that do not. We've started the process of going line by line through the budget to identify where cuts need to be made, ending tax breaks for corporations that ship jobs overseas and asking those who make a quarter of a million dollars a year to pay a little more while giving a generous package of tax cuts to 95 percent of working families.

o The President has pledged to cut the deficit in half by the end of his first term, ensuring we do not pass on to our children a debt they cannot pay.

Making Investments Critical to Our Economic Future

· Even as our budget makes hard choices to bring our deficit down, now is the time to act boldly and wisely and make investments critical to our economic future -- ending our dependence on foreign oil and creating millions of clean energy jobs, bringing down the high cost of health care, and giving all our kids a world-class education so they can compete in the 21st century economy. If we do that, we'll lay the groundwork today to make our economy strong for years to come. The President's budget will:

o Reduce our dependence on foreign oil and help us grow a clean energy economy. We will do this by instituting a cap-and-trade system to bring down greenhouse gas emissions and use the revenues to invest $15 billion per year in renewable and alternative sources of energy like wind and solar so that the jobs of tomorrow are created in this country -- and we will provide additional funding to help businesses and families transition to a clean energy economy.

o Address the crushing cost of health care and make a down-payment on the principle that we must have quality, affordable health care for every American through a historic commitment to comprehensive health care reform.

§ Health care is one of the keys to our fiscal future: if we do not control costs now, it will further erode the financial security of American families, expand the number of uninsured and weaken the vitality of our economy. The budget makes a down payment on health care reform, and we'll work with Congress this year to get it done.

§ The President's budget puts aside more than $630 billion over the next 10 years to reform health care. By tackling this issue, we can rein in high costs that are a drag on the entire economy, hurting families, businesses, and states.

o Expand the promise of education in America through investments that will ensure our students can compete in the 21st century high skills economy. By strengthening teaching, emphasizing science and technology, expanding access to early education and making sure that all American students can afford higher education -- including community college or vocational training - we will make sure that our nation is prepared to compete in an information-age economy.

Restoring Honesty, Accountability and Fiscal Responsibility

· While investments must be made to restore our economy, we can no longer avoid addressing the fiscal challenges we face. Being responsible means making tough choices to bring our deficit down, spending wisely and making sure that no corner of the budget escapes reform.

· This means changing not only what Washington does, but how it does it. The secrecy, waste, fraud, and abuse of the past will no longer be tolerated.

o We have started to bring a whole new level of accountability and transparency to government. Through Recovery.gov, every American can see where their Recovery Act taxpayer dollars are going. We will institute new reforms that will save billions of dollars by cutting waste and fraud, and continue a process that we've started to go line-by-line through the budget.

o It'll take time to work through the challenges we inherited - change doesn't come easy. But if we confront the problems we face and take responsibility for our future, America will rebuild, recover and emerge stronger than before.

EXECUTIVE SUMMARY: BUDGET HIGHLIGHTS

Honest Budgeting, Accountability and Fiscal Responsibility

· Cut the deficit the President inherited by at least half by the end of his first term. The inherited deficit for 2009 is $1.3 trillion, or 9.2 percent of GDP, and will fall to $533 billion, or 3.0 percent of GDP by 2013.

· Return to honest budgeting with a budget that provides a projected cost for overseas contingency operations, such as wars in Iraq and Afghanistan; recognizes the statistical likelihood of natural disasters instead of assuming that there will be no disasters over the next decade; assumes the full cost of fixing the AMT each year; and accounts for the fact that payments to Medicare physicians will not be drastically cut. This adds more than $2.5 trillion to our bottom line over 10 years. The Budget also provides a 10-year rather than a five-year look into our fiscal situation.

· Return to pay-as-you-go budgeting, by strengthening the budget enforcement rule with Congress that helped create the surpluses of a decade ago, the statutory pay-as-you-go rule.

· Let Americans track how their tax dollars are spent, and make sure that taxpayer dollars are spent wisely in our large entitlement programs.

· Streamline government procurement and reform federal contracting and acquisition.

Restoring Balance to our Tax System and Cutting Taxes for the Middle Class

· Make permanent the $800 "Making Work Pay" tax cut for 95 percent of America's working families while preserving all dedicated payroll taxes that go to Social Security and Medicare.

· Continue to cut taxes for the families of millions of children through an expansion and continuation of the Child Tax Credit.

· Make the $2500 American Opportunity Tax Credit permanent to help kids afford college.

· No tax increases for families making less than $250,000 a year while allowing tax rates to go back to Clinton-era levels for those at the top.

· Make saving for retirement easier as the economy recovers by laying the groundwork for the future establishment of a system of automatic workplace pensions on top of and clearly outside of Social Security. This is expected to dramatically increase both the number of Americans who save for retirement and the overall amount of personal savings for individuals.

· Help small businesses and innovative companies grow and create new jobs by eliminating capital gains for individuals on the gain from the sale of certain small business stocks held for more than five years and by making the Research and Experimentation Tax Credit permanent.

Making Investments Critical to our Economic Future

CLEAN ENERGY

· Begin a comprehensive market-based approach to transform our energy supply and slow global warming. The President will work with Congress to implement a cap-and-trade system to reduce greenhouse gas emissions and generate revenue of $150 billion over 10 years that will go to develop clean energy technologies, industries, and jobs.

· Modernize federal buildings and slash the federal government's energy use by 25 percent, adding upon the $4.5 billion provided in the Recovery Act to achieve the President's energy efficiency improvement goal by 2013.

· Weatherize low-income homes, saving working families on average $350 per year.

· Modernize the electric grid by building on efforts in the Recovery Act to create a new, smarter electric grid for the integration and use of greater amounts of renewable energy; increased utilization of innovative efficiency technologies; and a reduction in the electric congestion that costs ratepayers billions of dollars each year.

HEALTH CARE

· Transforming and modernizing the health care system by setting aside a reserve fund of more than $630 billion over 10 years that will be dedicated towards financing reforms in the American health care system. Funds will co