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Obama vows to fight for his budget

“I didn’t come here to do the same thing we’ve been doing or to take small steps forward, I came to provide the sweeping change that this country demanded when it went to the polls in November,” Obama said in his weekly radio address.”That is the change this budget starts to make, and that is the change I’ll be fighting for in the weeks ahead.”

The audacious 3.55-trillion-dollar budget proposal that Obama rolled out Thursday bristles with economic reforms and spending on healthcare, climate change and education.

The plan includes more than 600 billion dollars over 10 years for a “down payment” on healthcare reform and a similar annual sum for defense, and encompasses Obama’s drive to end the worst economic crisis since the 1930s.

Obama is to fulfill a campaign pledge to raise taxes on Americans earning more than 250,000 dollars a year from 35 percent to just under 40 percent, yielding some two trillion dollars over ten years.

The budget forecasts a 1.750 trillion dollar deficit in fiscal 2009, but foresees that figure falling to 1.171 trillion dollars in 2010.

The president said Saturday that because his blueprint represented “real and dramatic change,” it also presented a threat to the status quo in Washington.

He predicted that the insurance industry would not like the idea of competitive bidding for Medicare coverage for senior citizens while banks and big student lenders would be upset by an end to their subsidies.

The budget also calls for eliminating nearly 30 billion dollars in tax breaks for oil and gas companies, but Obama said the extra revenue will help fund a renewable energy economy and create jobs.

“In other words, I know these steps won’t sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they’re gearing up for a fight as we speak,” the president argued. “My message to them is this: So am I.”

The comments came after new government data showed the US economy contracted a worse-than-expected 6.2 percent in the fourth quarter of last year, highlighting the stunning meltdown in economic activity.

The Commerce Department reading on gross domestic product (GDP), the broadest measure of output, was far worse than the negative 5.4 percent annual rate expected by most analysts.

The fourth-quarter contraction was the sharpest since the first quarter of 1982, the data showed, and came as the world’s largest economy was winding up a full year of recession.

The revised Commerce Department estimate of GDP marked a whopping 2.4 percentage point change from an initial 3.8 percent contraction.

Mark Zandi, chief economist of Moody’s Economy.com, told The New York Times that he now placed the odds of “a mild depression” at 25 percent, up from 15 percent three months ago.

In his view, the unemployment rate would reach 10.5 percent by the end of 2011 -- up from 7.6 percent at the end of January—and average home prices would fall 20 percent on top of the 27 percent they have plunged already.

Losses in the financial system would also more than triple to 3.7 trillion dollars, the newspaper quoted him as saying.