The government now estimates 8.4 million jobs vanished in what some are calling the "Great Recession."
But the outlook improved this week when the Labor Department reported U.S. employers pared just 20,000 positions from their payrolls in January, pushing the nation's unemployment rate down to 9.7 percent.
The report offers hope that employers may start adding jobs soon. The private sector as a whole added 63,000 jobs last month, including 11,000 positions in manufacturing... its biggest gain since April of 2006.
But other parts of the economy didn't fare as well. The construction industry slashed 75,000 positions from its payrolls in January -- more than any other sector.
Public concern over unemployment -- and to some degree, the loss of a 60 vote Democratic majority in the Senate -- is prompting the Obama Administration to shift its attention AWAY from health care reform and BACK to the economy.
And this week, while promising to hold the line on spending, the President unveiled a record $3.8 trillion budget that would boost annual government red ink to an all-time high.
Only one week after calling for a "freeze" in domestic spending, the Obama Administration presented Congress with a deficit-busting federal budget. The President's proposal is heavy on job creation initiatives, war spending in Iraq and Afghanistan, and taxes on higher-income Americans.
According to the $3.8 TRILLION budget, the federal government will have to borrow one-third of all spending in the next fiscal year to run an annual deficit of $1.3 TRILLION.
The largest budget in American history only represents an estimate that includes revenue increases and cost-cutting measures which may not pass Congressional scrutiny.
The fiscal 2011 budget calls for rolling-back Bush-era tax cuts on families earning more than $250,000 or individuals making more than $200,000. In addition to a domestic spending freeze on non-discretionary spending, federal number crunchers hope to trim various programs at the U.S. Department of Agriculture.
Sec. Tom Vilsack: "We care deeply about farmers and ranchers and have worked hard to maintain the agricultural safety net while we've instituted some targeted reductions in farm program payments."
Those "targeted reductions" include slashing subsidies to so-called "wealthier farmers." Under current law, direct subsidies can be paid out if non-farm-related adjusted gross income, or AGI, is more than $500,000 OR farm-related AGI is more than $750,000.
But the Obama administration wants to lower both income caps by $250,000 over three years. The idea of capping farm payments to "wealthy farmers" has occasionally gained bipartisan support in recent years. But neither Congressional Republicans like Iowa's Charles Grassley or the Bush Administration were able to successfully slash direct payments.
The Obama Administration contends they are willing to deal with "reasonable" budget concerns from lawmakers.
President Barack Obama: "In order to meet this challenge, I welcome any idea from Democrats and Republicans. What I will not welcome, what I reject, is the same old grandstanding when the cameras are on and the same irresponsible budget policies when the cameras are off."
But on Capitol Hill, record-setting deficits during an election year could create a toxic atmosphere for budget negotiations.
Sen. Jon Kyl, R-Arizona: "The administration has been touting a spending freeze worth about $250 billion over a decade to help allay concerns about spending and debt. But it doesn't start, for one thing, until next October. And, therefore, to, me it's a little bit like the alcoholic that says, well, I'm going to quit drinking right after I have my next drink."