President Obama will release his budget proposal for fiscal year 2013, which begins October 1. The proposal will forecast a deficit of $1.33 trillion in fiscal year 2012, which ends September 30 - equivalent to 8.5 percent of the gross domestic product, and higher than 2011's $1.296 trillion deficit. 2012 will be the fourth year in a row that the U.S. budget deficit is more than $1 trillion -- for the record, $1 trillion is 1, followed by twelve zeros and it looks like this: $1,000,000,000,000.
To help close the budget gap, the president will call for the expiration of the Bush tax cuts for families that earn more than $250,000 and eliminate certain tax breaks and levy a 10-year $61 billion "financial crisis responsibility fee" on the largest financial companies.
On the spending side, the president is expected to make available $350 billion for job growth and extension of temporary payroll taxes and benefits for the long-term unemployed; $850 billion for education reforms; and $141 billion for overall research and development.
The budget will provide a welcome respite from the Greek debt drama. The impoverished nation headed into yet another weekend on the brink. Last week Greek leaders agonized over and finally agreed to a long-delayed deal on austerity measures. Within 24 hours of the deal, eurozone finance ministers called a time-out and insisted that the Greek parliament ratify the package before they would sign off on the $172 billion dollar bailout package, which it did on Sunday night. Time is of the essence - Greece needs the bailout funds to avoid defaulting on $19 billion worth of bonds that come due on March 20. If you like this story, don't worry: Most analysts believe that even if Greece does get the money, they will be back for more.
If the budget and Greece aren't enough for you, there will be plenty of data this week. Isn't it fitting that retail sales falls on Valentine's Day this year? Economists expect a rise, due in large part to auto sales. Unfortunately for consumers, prices are creeping up, due to rising energy prices. Still, inflation remains muted overall.
Some are calling the $25 billion mortgage settlement over alleged foreclosure abuses a gift to the banks, while others say it's just what the housing market needs. Under the agreement, 1 million homeowners will see principal reduction in their mortgages and another 750,000 who lost their homes will receive up to $2,000. While the money helps, there's still a long way to go for the housing market.
Stocks took a breather last week, snapping a five-week winning streak, but still remain 20 percent above the October 2011 lows.
-- DJIA: 12,801, down 0.47% on week, up 4.8% on year
-- S&P 500: 1,342, down 0.17%, up 6.8% on year
-- NASDAQ: 2,903, down 0.06%, up 11.5% on year
-- March Crude Oil: $98.67, up .8% on week
-- April Gold: $1725.30 down .8% on the week (up 10% YTD)
-- AAA National Average Price for Gallon of Regular Gas: $3.51
FACTOIDS OF THE WEEK: Valentine's Edition (source: National Retail Federation)
-- Total spending expected: $17.6 billion
-- Spending per person: $126.03, +8.5% from 2011
-- Spending per man: $168.74
-- Spending per woman: $85.76
-- Spending on jewelry: $4.1 billion
-- Spending on flowers: $1.8 billion
-- Spending on candy: $1.5 billion
-- Spending on gift cards: $1.1 billion
THE WEEK AHEAD:
President Obama releases his budget proposal for fiscal year 2013, likely to forecast a deficit of $1.33T
Goodyear, Met Life
8:30 Retail sales
8:30 Import/export prices
10:00 Business inventories
7:00 Weekly mortgage apps
8:30 Empire State manufacturing
9:15 Industrial production
10:00 Housing market index
2:00 FOMC minutes
8:30 Weekly claims
8:30 Housing starts
8:30 Producer price index
10:00 Philadelphia Fed
8:30 Consumer Price Index
10:00 Leading Indicators