President Barack Obama (left) with Treasury Secretary Tim Geithner speak about his fiscal 2010 federal budget. (AP Photo/Charles Dharapak)

Presidential Plans

The new president of the United States wants to make big changes. President Barack Obama says Americans have to start doing things differently.

The president is calling for a big increase in spending by the government. He says some of the changes he wants are long overdue.

Obama says he is ready to fight for changes to the health care system. He also is going to fight for changes to the way energy is made and used. And he wants the federal government to spend more money on education. 

The president says he is keeping the promises he made when he ran for election last year. His critics say he wants to give the government more power over the lives of people.

The president's plan would cover taxes and spending for each of the next 10 years. The budget period would start October 1. He outlined the proposals on February 26.

Obama was elected to a four-year term. He took office on January 20th. The law allows him to be president for no longer than eight years. The president who takes office in the ninth year of the 10-year plan will be able to make changes.

Congress must approve the budget
The president can suggest taxing and spending policies. But only Congress can approve them. Congress is made up of the Senate and the House of Representatives. Both bodies of Congress must vote to approve taxes and spending.

The budgets that finally are approved often are very different from what a president first suggests. Members of the Democratic Party now hold more than half of the seats in each of the two houses of Congress. Obama is a Democrat.

The president has tried to reach out to members of the Republican Party in his first weeks in office. But almost all Republicans voted against all of the plans that Obama sent to Congress.  

Obama says his budget plans are bold and wise. He says he is ready to fight for them.

The president says he would raise revenue by increasing taxes on people who make more than $250,000 a year. That is about three percent of taxpayers. He said he would reduce taxes for most Americans.

A look at the economy
The 10-year plan would be in addition to the $787 billion economic stimulus plan that Obama and Congress worked out shortly after he became president. The stimulus plan is aimed at stopping the economy from continuing to decline.

The U.S. Commerce Department reported February 27 that the economy shrank at an annual rate of 6.2 percent during the three months from October through December 2008.

The rate of the decline was one of the highest in the nation's history since the late 1940s. The nation's unemployment rate increased to 7.6 percent in January. Many people think it could hit 10 percent before the end of 2009.

Millions of people are unemployed. Banks have reduced the amount of money they lend out to borrowers by as much as 90 percent. Bank lending is a key part of the American economy.

Many forecasters think the recession will end late in 2009 or early in 2010. The first of Obama's budget proposals will take effect in late 2009. Some of the changes will not go into effect for three more years.