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Obama straddles middle ground with $3.73 trillion budget

Reps. Bill Flores, R-Texas, Scott Garrett R-N.J., and Robert Woodall,  R-Ga., House Budget Committee members, take a look at President Barack Obama’s proposed federal budget.

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Reps. Bill Flores, R-Texas, Scott Garrett R-N.J., and Robert Woodall, R-Ga., House Budget Committee members, take a look at President Barack Obama’s proposed federal budget.

WASHINGTON — The $3.73 trillion budget plan President Barack Obama outlined Monday straddled deepening worry about spending with his desire to "win the future" through education and infrastructure investments — a cautious middle ground as he looks to the political future.

Obama put off tough decisions about fast-growing programs like Social Security and Medicare, and his proposal was fiercely rejected by Republicans as not going far enough, setting up tense negotiations with Congress and hardening a theme for the 2012 elections.

The White House pitched the blueprint as a path toward a more sustainable deficit by the middle of the decade. Borrowing over the next decade will grow by $7.2 trillion, according to projections, but $1.1 trillion less than it would have, officials said.

"While it's absolutely essential to live within our means, while we are absolutely committed to working with Democrats and Republicans to find further savings and to look at the whole range of budget issues, we can't sacrifice our future in the process," Obama said Monday at a middle school in Maryland.

Despite plenty of talk about "tough choices," Obama's plan still envisions spending rising by an average of $218 billion for nine years. And it would leave the government $26.35 trillion in debt after 10 years — an increase of $10.87 trillion over this year, and $12.82 trillion over last year.

"A $1 trillion reduction is insignificant and does not get us on the right course, and historically we know the president's numbers are inflated so it will be less reduction," Sen. Jeff Sessions, R-Ala., the ranking member of the Budget Committee said on CNN's American Morning.

Obama's proposal to tackle growth comes partly through a five-year freeze of discretionary spending he said would cut more than $400 billion and bring that type of spending to the lowest share of the economy since the Eisenhower era. He would also eliminate tax breaks for the wealthy and business, from the oil and gas industry to U.S.-based multinational corporations.

In all, the plan would impose about $730 billion in new taxes on businesses and wealthy individuals over the next decade, while cutting about $400 billion in taxes on middle-income families, the working poor and other businesses, for a net tax increase of about $330 billion.

An additional $709 billion could be collected over the next decade if the Bush-era tax cuts are allowed to expire at the end of 2012. Obama and Democrats agreed to a two-year extension in November, while securing Republican support for additional unemployment benefits. Republicans will fight to make the cuts permanent.

Much the proposal's reductions in 2012 would be converted to new spending in education, clean energy, roads and high-speed rail — priorities the president outlined in his State of the Union speech last month.

A big winner was education. The budget would increase 11 percent to more than $77 billion and keeps Pell grants at their maximum $5,550 a year per student, though other provisions would be trimmed. It provides $900 million to continue the competitive "Race to the Top" program Florida has benefited from. Obama wants $80 million for new teachers in science and mathematics.

The redirected and new spending, however, would add $8 billion to the budget deficit in 2012.

The president's budget projects that the deficits will total $7.21 trillion over the next decade with the imbalances never falling below $607 billion. Even then that would exceed the deficit record before Obama took office of $458.6 billion in 2008, President George W. Bush's last year in office.

Sen. Marco Rubio, a Florida Republican who is among a crop of lawmakers elected in November on antispending platforms said, "Sadly, the president has missed a golden opportunity to have an adult conversation with the American people about the seriousness and urgency of our debt crisis."

Some Democrats were uneasy as well and wanted Obama to more closely hew to recommendations set out by a deficit reduction commission.

"It is not enough to focus primarily on cutting the nonsecurity discretionary part of the budget," said Senate Budget Committee Chairman Kent Conrad, D-N.D.

House Republicans are struggling to maintain a campaign pledge to slash $100 billion from the current budget, and leaders, so far, have sidestepped big programs like Medicare, Medicaid and Social Security, as Obama did Monday. A deficit commission Obama championed recently released a report calling for a number of measures, including raising the eligibility age for Social Security.

Obama plans about $62 billion in health care efficiencies and an expansion of the use of generic drugs. But he would roll those savings into preventing a potentially devastating reduction in payments to Medicare doctors.

Though Obama would pour billions into education and other areas, his team emphasized some of the more difficult choices that had to be made, including cuts to heating assistance for the poor and Community Development Block Grants, a significant source of funding for local governments. Funding for Great Lakes restoration also would be cut back.

Most federal agencies would see cuts. Obama's plan calls for a slight reduction to NASA, and a $78 billion cut to the once untouchable defense budget over five years.

The Pentagon's budget includes more than $117.8 billion to cover the wars in Iraq and Afghanistan, a decrease from the $160 billion in 2011 and the smallest spent on the wars since 2006.

Transportation spending would increase by 68 percent as Obama pushes his plans to expand high-speed rail.

Ultimately Obama's plan is only a guideline for Congress. But it represents a political statement that tries to bridge the Republican zeal for cuts with a Democratic base that strongly opposes cuts to safety net programs.

He is also trying to appeal to independent voters who may not want to see extreme cuts.

"It sounds vaguely responsible and a counter to the Republican budget, which has far deeper cuts," said Republican strategist John Feehery. "It is pablum, but pablum sells."

Information from the Associated Press and McClatchy Newspapers was used in this report.

By the numbers

Obama used his 2012 budget to make the case for selectively cutting spending while increasing resources in some areas. Republicans say the cuts do not go far enough.

2.4 percent

Reduction from current budget, which expires Sept. 30

$400 billion

Savings achieved under five-year freeze on nondiscretionary domestic spending

$1.65 trillion

Projected deficit for this year, a record

$1.1 trillion

Deficit reduction over 10 years under the plan

Obama straddles middle ground with $3.73 trillion budget 02/14/11 [Last modified: Monday, February 14, 2011 11:13pm]
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