President Obama is expected to announce many changes to government spending in his budget and some proposals are going to be hard to swallow. The $3.8 trillion budget is in favor of education, civilian research as well aid to states.
Not surprisingly, the budget will create two distinct groups, winners and losers. Expected winners should include the Energy Department, the National Science Foundation and the National Institutes of Health who are expected to get a boost in their funding. The losers of this budget will be NASA, some historic preservation programs and unspecified public works projects of the Army Corps of Engineers, part of the three-year freeze that was announced by The President earlier.
The freeze is aimed at reducing the snowballing deficit and is expected to bring the overall figure down by about $15 billion. If the proposals stay in place, the expected total benefit would be around $250 billion in ten years time. Some are questioning the proposed cuts in the face of the growth the economy experienced in the last quarter, but there is a reason why that growth may not continue. The growth was a result of benefits granted to business by the stimulus package and many of those benefits run out this year. So analysts believe that the growth throughout this year to be less than that from the last quarter. This would only bring down the unemployment rate by 1% and that too if everything goes according to plan.