A smaller U.S. Department of Housing and Urban Development (HUD) and a new $61 billion ‘fee’ levied against the largest financial institutions are part of the $3.8 trillion fiscal-year 2013 budget presented by the Obama administration.
Bloomberg reports that under the administration's proposals, HUD's budget would drop by 7.5%. Two other federal departments with successful home mortgage programs would come off less severely: the U.S. Department of Agriculture's budget would be cut by 3%, but the U.S. Department of Veterans Affairs would have a 4% budget increase – albeit pegged to veteran medical care costs rather than home loans.
The proposed budget would also include a new $61 billion ‘Financial Crisis Responsibility Fee’ that would be collected from the nation's largest financial institutions over the next 10 years. The fee would be used to help finance the administration's bank bailout program and mortgage refinance initiatives.
The president called his budget ‘a step in the right direction,’ adding that it offered a ‘roadmap for how we can grow the economy [and] create jobs.’ However, the budget forecasts a $1.33 trillion deficit – far higher than the $956 billion forecast last September – and it marks the fourth straight year that the federal deficit will surpass the $1 trillion mark. In 2009, President Obama pledged that he would have the federal deficit cut in half by the end of his first term.