The US budget 2012 focuses on achieving better results than its global competitors in areas like innovation, construction and education. The focus of the 2012 federal budget is on setting up new industries and jobs that can sustain the national economy.
Considering the present financial condition of the US, the top priority now is restoration of financial stability.
Importance is also being given to restructuring the government, which helps it become better in terms of effectiveness, openness and efficiency for the American people.
US Budget 2012 Factors Taken Into Consideration
The President s 2012 Budget is looking to make sure that expenses are manageable and illogical spending can be negated, preferably, completely.
Simultaneously investments are also being accorded a lot of importance so that the economy can keep growing. The federal resources are expected to be geared towards areas that are supposed to play an important role in determining the USA s economic future education, clean energy, innovation and infrastructure.
The USA budget 2012 will also bring major changes in the modus operandi of the federal government. Federal funding is supposed to be increased and there would be more focus on waste reduction.
Highlights of US Budget 2012 and Economic Implications
At least $1 trillion has been assigned for deficit reduction. 66.67% of this will come from reduced spending and ensure that in next five years there is no increase in debt.
$1.1 trillion has been earmarked for deficit reduction over 10 years. This will abolish tax cuts extended to high income earners during 2001 and 2003 and also exclude war savings.
The President has fulfilled his promise of 50 percent debt reduction till his first term ends.
The optional restrictions in expenditure, over the next five years, will bring down fiscal deficit by more than $400 billion in the coming 10 years expenses will also be the lowest since President Eisenhower s reign.
$148 billion has been set aside for research and development with $32 billion to be invested at the National Institutes of Health. This will help in doubling development and research activities in energy efficiency, deployment funds, and double the investments applicable for important basic research.
Targets have been set to introduce 1 million electric vehicles by 2015, 20 percent reduction in energy used in construction industry by 2020 and doubling generation of electricity through clean energy sources by 2035.
Tax credits for research and development would be simplified, made permanent and expanded.
Setting up 20 Economic Growth Zones the worst affected areas will be provided tax incentives for promoting employment and investment.
Maintaining the maximum level of money granted through the Pell Grant Award this will help 9 million students attend college.
Reforming funding for K-12 schools this will assist in maintenance of standards, reward success and support innovation.
Expansion of Race to the Top concept towards early childhood education, university funding, school districts and job training.
Preparing 100,000 teachers for science, engineering, technology, and mathematics.
Investment of $50 billion for job creation; setting up a National Infrastructure Bank that will assist national level projects and make high speed rail accessible to 80% people in the next 25 years. This is part of a six year comprehensive surface transportation bill.
Setting up a wireless broadband network that will make high speed internet accessible to 98% people in USA.
200 terminations, savings and reductions that will save at least $33 billion a year.
Reduction of $78 billion in coming 5 years from the expenditure plan of Pentagon. Defense spending has been lowered by more than 5% compared to the plan proposed for 2011 fiscal.
$62 billion for specific and new health care savings and more than 70% reimbursement in Medicare payment for doctors to encourage them to treat more patients.
Payments for Alternative Minimum Tax for three years that will prevent increase in tax levels for middle class families.
Corporate tax reforms to simplify systems, lowering rates of taxation and doing away with special interest issues.
Strengthening Social Security
Reduction in financial assistance of $950 million to states revolving funds used for water treatment plants and other infrastructure; at least $1 billion as grants for big airports.
Implementation of key suggestions made by Fiscal Commission freezing federal civilian worker pay, PBGC reform, medical malpractice reform and government restructuring scheme.
Deduction of at least $2 billion in administrative expenditure such as travel, supplies, supplies and advisory contract services.
Applying grant programs that are premised on Race to the Top model.
Establishing a procedure for disposing of underused and additional federal real estate at the quickest possible time.
Encouraging pay for success bonds that work in areas where federal programs have failed. Taxpayers will not pay in case the programs are financially unsuccessful.
US Budget � Deficit Projection
US Budget Sample Cuts
Community Development Block Grants deduction by $300 million.
Great Lakes Restoration Initiative deduction by $125 million or 25%.
LIHEAP deduction by $2.5 billion or 50%.
US Budget Expected Receipts
The estimated revenue to be generated during the fiscal 2012 may be enumerated as below:
$1.141 trillion through Individual Income Tax
$30 billion through Customs duties
$329 billion through Corporate Income Tax
$14 billion through Gift and Estate taxes
$925 billion through payroll taxes such as Social Security
$66 billion through Federal Reserve System and earning deposits
$103 billon through Excise Tax
$20 billion through other avenues