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Budget deal reveals wide cuts, more politics to come

WASHINGTON — Look for cuts in high-speed rail, community development projects and other social programs from the spending reduction agreement between the White House and Congress.

Some of the cuts are already in effect, and Congress will vote on the rest later in the week.

And that could be only the beginning. More dramatic reductions could be coming, as President Barack Obama and House Republicans escalate their battle this week over how to slash government debt.

Obama plans to speak about his long-term plans Wednesday afternoon at George Washington University, while House Republicans are expected to debate and vote on their budget blueprint on Thursday or Friday.

White House officials Monday declined to speculate on potential changes to Medicare, Medicaid, Social Security and tax policy or on the dollar amounts of spending cuts. Nor would they say whether Obama's speech would offer specifics beyond the broad themes he has been addressing for months.

White House press secretary Jay Carney said Obama will very clearly lay out his vision for reducing the debt and deficit, expected to hit a record $1.65 trillion this fiscal year, and that his policies would be "balanced" and "bipartisan."

Chances are that any long-term spending cuts could wind up as part of legislation to raise the nation's $14.3 trillion debt ceiling, which could be reached next month.

With the White House now sensing a protracted fight with some Republicans over the debt ceiling, Obama, through Carney, also said Monday that he had erred as a senator in 2006 when he voted to oppose a higher debt limit.

"Obama regrets that vote and thinks it was a mistake," Carney said. "He realizes now that raising the debt ceiling is so important to the health of this economy and the global economy that it's not a vote that, even when you are protesting an administration's policies, you can play around with."

Obama's speech this week comes at a time when Republicans are largely driving the budget agenda. The drama is unfolding in three chapters.

• Shrinking current spending. House GOP leaders wanted $40 billion in cuts over the rest of the fiscal year, which ends on Sept. 30, while Democrats sought $33 billion. Negotiators agreed to ax $38.5 billion.

The House is expected to vote on the accord Wednesday, with the Senate to follow Thursday.

• Sealing the budget deal. Because lawmakers need a few days to write legislation containing the precise details of their agreement, Obama on Saturday signed legislation to keep the government open through Thursday.

That plan includes $2 billion in cuts. The community development fund, which includes grants for neighborhood projects, would be reduced. So would funding for transportation planning, research and development, as well as money for high-speed and intercity passenger rail.

• The long-term plan. Once the short-term issues are dealt with, the bigger fight begins in earnest. The House's 10-year proposal, likely to be debated and voted on Thursday and Friday, would cut $6.2 trillion from anticipated spending over the next 10 years.

The fight over cuts, though, could become part of the debt limit fight. Republicans say they'll insist on major cuts before they'll go along with a higher debt, while Obama doesn't want the debt limit decision linked to other conditions.

Highlights of spending cuts

The House and Senate appropriations committees were still working Monday on determining specific cuts and program levels for the next six months. Some $12 billion in cuts already have been enacted as part of three stopgap spending measures, including:

$5.3 billion from several accounts previously used by lawmakers to "earmark" pet projects
$1.7 billion from leftover funds from 2010 Census
$1.5 billion from high-speed rail grants
$650 million by not repeating a one-time appropriation for highway projects
$468 million from several education programs
$350 million from Labor Department programs, including grants for community service jobs for senior citizens
$276 million pandemic flu prevention programs
$200 million from unspent wildfire fund
$200 million from unspent Social Security Administration Internet technology funds

Additional cuts likely to be reflected in this week's legislation include:

$4.2 billion in defense accounts previously earmarked
$2.5 billion from Labor Department and Health and Human Services Department programs
$1.1 billion from an across-the-board cut to domestic accounts
$700 million from clean and safe drinking water projects
$630 million from military construction and Veterans Affairs
$495 million from first responder grants.
$350 million by not repeating emergency aid for milk farmers

Non-appropriated savings: Some $17.8 billion involves reductions in what can be spent on so-called mandatory programs whose budgets run mostly on autopilot. They often have little real impact in terms of cutting the deficit. Among these cuts are caps on trust funds, $3.5 billion in unused Children's Health Insurance Program funds, $2.5 billion in leftover highway money unavailable under current budget caps and $500 million from eliminating summer school Pell Grants.

Associated Press

Budget deal reveals wide cuts, more politics to come 04/11/11 [Last modified: Tuesday, April 12, 2011 12:33am]
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