* 43% Mandatory Spending (Medicare, Medicaid, Social Security)
* 7% Interest on Debt
* 22% Defense, Security
* 11% Domestic
* 18% Other entitlements
The projected revenue of $2.9 trillion includes:
* 33% Payroll Tax
* 12% Corporate Income Tax
* 3% Excise Tax
* 47% Income Tax
* 5% Other
Although the projected deficit of $901 billion is less than $1 trillion threshold, it is still a matter of concern as the government needs to borrow 24 cents for each dollar it spends. Part of the revenue growth will come from letting the Bush-era tax cuts for households earning $250,000 per year and on dividend incomes for wealthy taxpayers expire after 2012.
*** SALIENT FEATURES OF 2013 OBAMA BUDGET BLUEPRINT
** Elimination of numerous tax breaks for oil, coal and gas companies (would raise $41 billion over 10 years).
** Purchase cuts of Navy ships and F-35 JSF aircrafts.
** Trimming of 100,000 troops from Defense payroll over the coming years.
** Seeking $476 billion for transpotation projects, including roads, bridges and a much-criticized high-speed rail initiative. Proposal included $50 billion "upfront" investment for transportation.
** Disbursement of grants to better performing schools as part of the "Race to the Top" initiative.
** Imposition of (10-year, $61 billion ) new tax on banks to partly recover bailout from 2008 financial crisis.
** Investment of $30 billion to modernize at least 35,000 schools, and $30 billion to help states hire teachers, police and fire personnel.
** Creation of $8 billion "Community College to Career Fund" to train 2 million workers for jobs in potential growth areas.
House Republicans' Budget Plan for Fiscal 2012
On March 20, 2012, House Republicans infused in the Presidential Year of Politics their own dose of economic remedy by unveiling their own budget bluprint for Fiscal 2012 (October 1, 2012-September 30, 2013). House Budget Committee Chairman Paul Ryan, R-Wis., this time modified the plan on Medicare reform slightly compared to last year's much villified plan of replacing traditional Medicare by providing seniors subsidy to buy private insurance. According to this year's budget blueprint, seniors (seniors who are currently eligible for Medicare or 55 and older are exempt) will be offered the subsidy to buy private healthcare insurance from the federal insurance exchange, while retaining the traditional Medicare as an alternative offering for the future retirees. Under this year's House Republicans' budget proposal, the Medicare eligibility age will increase to 67 from 65 in 10 years. Medicare spending will be shaved by $205 billion deeper than Obama blueprint over the next decade.
* Medicaid
Medicaid will be cut by $770 billion (over the next 10 years) more than what President Obama has proposed in his budget blueprint. The Medicaid will be given to states as flexible block grants as will be food stamps and housing assistance.
* Changes to Tax Codes
Not clear yet on details, but the existing six tax rates will be simplified to two rates: 10 percent and 25 percent, with most of the tax credits and deductions to be eliminated.
* Corporations
The corporate tax rates will be lowered to 25 percent from 35 percent, and the regime will be changed to "territorial" tax instead of tax on "worldwide profit".
However, Ryan blueprint wants to hasten discretionary and mandatory spending cuts to avoid $110 billion automatic cuts from military and domestic programs ($55 billion in Pentagon spending Plus $43 billion nondefense appropriations Plus $12 billion in other programs) beginning in 2013 as part of August 2011 debt deal between Congress and White House.
Under the House plan, deficit for Fiscal 2012 will fall from the current level of $1.18 trillion to $797 billion as compared to $977 billion under Obama's blueprint. By 2016, the budget deficit will fall, under the House Plan, to $241 billion as compared to $529 billion as estimated by the Congressional Budget Office last week. The Ryan plan will accumulate an additional debt of $3.1 trillion through 2022 as compared to $6.4 trillion under the Obama blueprint. Ryan plan envisions repeal of Obamacare and elimination of Freddie Mac and Fannie Mae.
BABY PRODUCTS AND FORMULA
FDA, Abbott Reach Agreement on Plant Starting
The current baby formula shortage can be traced to a market monopoly by four companies: Abbott, Perrigo, Nestle SA and Mead Johnson. Combined, they control 90% of the U.S. baby formula market. In February 2022, when the contamination at the largest U.S. baby formula plant at Sturgis, Michigan was reported and the operation at the plant run by Abbott was subsequently suspended, an already strained market for baby formula started to plunge into a total chaos of a disbalanced demand-supply equilibrium. In recent weeks, the crisis has become a headwind for Biden administration, and Republicans have blamed President Biden for the scarcity. On May 16, 2022, Abbott and FDA reached an agreement to resume operation at the Sturgis plant, but it would take 6 to eight weeks to normalize the movement of pallets of formula from the plant to store shelves.
House Unveils a $28 million Aid Package
House Democrats on May 17, 2022 unveiled a $28 million aid package to help address the baby formula crisis that had afflicted the nation and created a political liability for Democrats and President Joe Biden. The aid package unveiled by Rep. Rosa DeLauro, chair of the House Appropriations Committee, will augment staffing level at FDA to accelerate the inspection regime, streamline the regulatory process and cut down the latency between production and shelfing.
Defense Production Act Invoked to Address Baby Formula Shortage
President Joe Biden on May 18, 2022 invoked the Defense Production Act to ease the baby formula crisis by streamlining all related steps in the production and distribution ecosystem and accelerate the production of baby formula domestically. In addition, the U.S. military will charter commercial flights to import baby formula from overseas makers as part of the Operation Fly Formula. President Biden authorized Agricultural Department and Department of Health and Human Services to request Pentagon to arrange, under the Operation Fly Formula, formula imports as a bridge before the domestic production ramped up.
78K Pounds of Baby Formula Flown in
U.S. Military on May 22, 2022 flew in approximately 78,000 pounds of baby formula from Germany to Indianapolis. Since U.S. military could not requisition commercial aircraft, it used military plane to fly in pallets of baby formula. Agricultural Secretary Tom Vilsack was on hand on May 22, 2022 to greet the first shipment of baby formula under Operation Fly Formula.
Abbott Plant in Michigan Resumes Operation
Abbott Nutrition's baby formula plant at Sturgis, Michigan resumed operation on June 4, 2022, bringing a sigh of relief for Biden administration and a leery nation as parents had been searching for baby formulas all over. It will take at least 7 to 8 weeks for the formula to reach store shelves and help ease the supply crisis that had dawned since February 2022.
Third Tranche of Baby Formula Arrives, This Time to DFW
On June 9, 2022, a gargantuan FedEx Express MD-11 charter flight brought in about 11,000 pounds of baby formula to the DFW International Airport. Large pallets of Nestle baby formula have been flown in as part of Operation Fly Formula and they will be sold entirely online. June 9, 2022, marks the third Operation Fly Formula flight. There will be more Operation Fly Formula flights in the coming days. Operation Fly Formula is a joint endeavor of Health and Human Services, Agricultural Department, General Services Administration and Department of Defense. FDA is also involved to certify the quality of the product imported from overseas.
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