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FoxNews...
Obama Sends $3.7
Trillion Budget to Congress
February 14, 2011
Editor’s Note: Also posted at the end of this story are links from a
variety of reports, including one from the Office of Budget and
Management.
President Obama sent Congress a $3.73 trillion budget Monday, a
spending plan for 2012 that projects $1.1 trillion in deficit savings
over the next decade but also continues adding to the national debt for
years to come.
Republicans, who are still trying to cut billions out of this year’s
budget, slammed the proposal after giving it a quick analysis Monday
morning. The top Republicans on the House and Senate budget committees
said it would push $8.7 trillion in new spending while piling another
$13 trillion onto the debt over the next 10 years.
“It would be better to do nothing than to pass this budget,” House
Budget Committee Chairman Paul Ryan, R-Wis., said Monday.
The president, visiting a school in Baltimore, said his budget reflects
“tough choices and sacrifices.” Obama said more will need to be done to
address long-term shortfalls but described his spending plan as a “down
payment” toward that effort.
“If we’re going to walk the walk when it comes to fiscal discipline,
these kinds of cuts will be necessary,” he said.
White House Budget Director Jack Lew hit the news shows early to defend
the president’s proposal, saying the budget makes “real cuts” while
investing in priority programs.
“You’ve got to start somewhere,” Lew told Fox News. He said the
long-term plan is to draw down the deficit to a point that can
stabilize the debt. According to officials, the goal is to make sure
the debt stops increasing as a share of the economy by the middle of
the decade.
“By the middle of the decade, we’re paying our bills,” Lew said.
Senior administration officials said Obama would achieve two-thirds of
his projected savings through spending cuts, including a five-year
freeze on many domestic programs. The other one-third would come from
tax increases, including limiting tax deductions for high-income
taxpayers, a proposal Obama put forward last year only to have it
rejected in Congress.
But the projected savings would be dwarfed by the $7.21 trillion in
cumulative deficits over that 10-year period.
“We have no plan in this budget to pay down debt or ever come close to
balancing it,” Alabama Sen. Jeff Sessions, ranking Republican on the
Senate Budget Committee, told Fox News.
The new estimates project the deficit for the current year will surge
to an all-time high of $1.65 trillion, reflecting a sizable tax-cut
agreement reached with Republicans in December. From there, the deficit
in 2012 would dip to $1.1 trillion, giving the country a record four
straight years of $1 trillion-plus deficits.
Though administration officials say the president will fulfill his
pledge of cutting the deficit he “inherited” in half by the end of his
first term, his 10-year projections show the figure persistently
hovering above the already-high $458.6 billion deficit on the books in
2008, former President George W. Bush’s last full year in office.
Obama’s 2012 budget projects the imbalances never falling lower below
$607 billion.
“How is that living within your means?” Sessions said Monday.
David Walker, former U.S. comptroller general and head of the Comeback
America Initiative, released a statement saying the plan was missing
“concrete proposals and specific timelines” for addressing the nation’s
structural deficits.
“The failure of President Obama’s fiscal 2012 budget to provide a path
forward to address the nation’s structural deficits is a major
disappointment,” he said.
The Obama budget recommendation, which is certain to be changed by
Congress, would spend $3.73 trillion in the 2012 budget year, which
begins Oct. 1, a reduction of 2.4 percent from what Obama projects will
be spent in the current budget year.
The Obama plan would fall far short of the $4 trillion in deficit cuts
recommended in a December report by his blue-ribbon deficit commission.
That panel said that real progress on the deficit cannot be made
without tackling the government’s big three entitlement programs --
Medicare, Medicaid and Social Security -- and defense spending.
Obama concentrated his cuts in the one-tenth of the budget that covers
most domestic agencies, projecting $400 billion in savings from a
five-year freeze in this area. Some programs would not just see
spending frozen at 2010 spending levels but would be targeted for
sizable cuts.
The budget proposes program terminations or spending reductions for
more than 200 programs at an estimated savings of $33 billion in 2012.
Programs targeted for large cuts included Community Development Block
Grants, trimmed by $300 million, while a program that helps pay heating
bills for low-income families would be cut in half for a savings of
$2.5 billion while a program supporting environmental restoration of
the Great Lakes would be reduced by one-fourth for $125 million in
savings.
The biggest tax hike would come from a proposal to trim the deductions
the wealthiest Americans can claim for charitable contributions,
mortgage interest and state and local tax payments. The administration
proposed this tax hike last year but it was a nonstarter in Congress.
Obama’s budget would also raise $46 billion over 10 years by
eliminating various tax breaks to oil, gas and coal companies.
While Obama’s budget avoided painful choices in entitlement programs,
it did call for $78 billion in reductions to Pentagon spending over the
next decade by trimming what it views as unnecessary weapons programs
such as the C-17 aircraft, the alternative engine for the Joint Strike
Fighter aircraft and the Marine expeditionary vehicle.
Another $62 billion in savings would be devoted to paying to prevent
cuts in payments to doctors in the Medicare program over the next two
years. Congress has for several years blocked the cuts from taking
effect but the effort drove the deficits higher because lawmakers did
not find offsetting savings.
The budget will propose $1 billion in cuts in grants for large
airports, almost $1 billion in reduced support to states for water
treatment plants and other infrastructure programs and savings from
consolidating public health programs run by the Centers for Disease
Control and various U.S. Forest Service programs.
While cutting many programs, the new budget does propose spending
increases in selected areas of education, biomedical research, energy
efficiency, high-speed rail and other areas Obama judged to be
important to the country’s future competitiveness in a global economy.
In the energy area, the budget would support Obama’s goal of putting 1
million electric vehicles on the road by 2015 and doubling the nation’s
share of electricity from clean energy sources by 2035.
Republicans, who took control of the House in the November elections
and picked up seats in the Senate in part because of voter anger over
the soaring deficits, called Obama’s efforts too timid. They want
spending frozen at 2008 levels before efforts to fight a deep recession
boosted spending in the past two years.
They are scheduled to begin debating on Tuesday a proposal that would
trim spending by $61 billion for the seven months left in the current
budget year, which ends Sept. 30. They also have vowed to push for
tougher cuts in 2012 and future years.
“Americans don’t want a spending freeze at unsustainable levels,” said
Senate Republican leader Mitch McConnell. “They want cuts, dramatic
cuts.”
The Associated Press
contributed to this report.
Read it at FoxNews
Office
of Budget and Management
Dayton Business Journal… Obama cuts popular
programs
Politico… Obama vs U.S. House
Business Insider... tax hikes
Huffington Post... cuts target poor
Reuters... cuts slash $1.1 trillion
USAToday... Boehner, GOP says “Obama Spending the
Future”
Chicago Sun-Times/The Beacon-News... Budget resurrects
rejected tax increases
More links...
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