Obama official says new budget won't be pain-free

Obama official says new budget won't be pain-free

MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON — President Barack Obama will send Congress on Monday a $3 trillion-plus budget for 2012 that promises $1.1 trillion in deficit reduction over the next decade by freezing many domestic programs for five years, trimming military spending and limiting tax deductions for the wealthy.

Jacob Lew, the president's budget director, said Sunday that the new spending plan for the 2012 would disprove the notion that "we can do this painlessly ... we are going to make tough choices."

GOP says budget will increase debt

Republicans rejected that appraisal, castigating Obama for proposals that will boost spending in such areas as education, public works and research, and charging that Obama's cuts are not deep enough.

They vowed to push ahead with their own plans to trim $61 billion in spending from the seven months left in the current budget year and then squeeze Obama's 2012 budget plan for billions of dollars in additional savings in response to voters alarmed at an unprecedented flood of red ink.

"He's going to present a budget tomorrow that will continue to destroy jobs by spending too much, borrowing too much and taxing too much," House Speaker John Boehner said on NBC's "Meet the Press." Boehner released a statement from 150 economists calling on Obama to take immediate action to reduce government spending.

Lew, appearing on CNN's "State of the Union," rejected criticism that the $1.1 trillion deficit-cutting goal fell far short of the $4 trillion in deficit cuts outlined by the president's own deficit commission in a plan unveiled last December. That proposal would attack the biggest causes of the deficits — spending on the benefit programs Medicare, Medicaid and Social Security — and defense spending.

No painful choices yet

Obama's budget avoided the painful choices put forward by the commission on benefit programs. Lew said it would be a mistake to say the report did not have an impact on the president's proposals.

He cited a proposal to pay for keeping doctors' payments under Medicare from being cut sharply. Instead of borrowing the money to prevent those cuts, the administration was putting forward $62 billion in savings in other areas to prevent those cuts over the next two years, Lew said.

In addition, the administration is reviving a proposal Congress rejected last year to limit tax deductions the wealthy can get for charitable donations, mortgage interest payments and state and local taxes, and using those savings to pay for keeping the Alternative Minimum Tax from hitting more middle-class families over the next two years.

Deficit will go down when tax cuts for rich are repealed

An administration official, who spoke on condition of anonymity before the budget was released, said one-third of the $1.1 trillion in deficit reduction the administration is projecting over the next decade would come from additional revenue with the bulk of that reflecting the limitations on tax deductions by the wealthy.

The administration has said that its five-year freeze will save $400 billion over the next decade with many programs slated for even bigger cuts. Community development block grants would be trimmed by $300 million, the government's program to help low-income people pay their heating bills would be cut in half for a savings of $2.5 billion, and a Great Lakes environmental restoration program would but cut by 25 percent to save $125 million, according to an Office of Management and Budget summary.

That document also said that the budget would cut the Pentagon's spending plans over the next decade by $78 billion with reductions in various weapons programs deemed unnecessary including the C-17 aircraft, the alternative engine for the Joint Strike Fighter aircraft and the Marine expeditionary vehicle.

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Associated Press writers Jim Kuhnhenn, Darlene Superville and Andrew Taylor contributed to this report.

WASHINGTON — President Barack Obama will send Congress on Monday a $3 trillion-plus budget for 2012 that promises $1.1 trillion in deficit reduction over the next decade by freezing many domestic programs for five years, trimming military spending and limiting tax deductions for the wealthy.

Jacob Lew, the president's budget director, said Sunday that the new spending plan for the 2012 would disprove the notion that "we can do this painlessly ... we are going to make tough choices."

GOP says budget will increase debt

Republicans rejected that appraisal, castigating Obama for proposals that will boost spending in such areas as education, public works and research, and charging that Obama's cuts are not deep enough.

They vowed to push ahead with their own plans to trim $61 billion in spending from the seven months left in the current budget year and then squeeze Obama's 2012 budget plan for billions of dollars in additional savings in response to voters alarmed at an unprecedented flood of red ink.

"He's going to present a budget tomorrow that will continue to destroy jobs by spending too much, borrowing too much and taxing too much," House Speaker John Boehner said on NBC's "Meet the Press." Boehner released a statement from 150 economists calling on Obama to take immediate action to reduce government spending.

Lew, appearing on CNN's "State of the Union," rejected criticism that the $1.1 trillion deficit-cutting goal fell far short of the $4 trillion in deficit cuts outlined by the president's own deficit commission in a plan unveiled last December. That proposal would attack the biggest causes of the deficits — spending on the benefit programs Medicare, Medicaid and Social Security — and defense spending.

No painful choices yet

Obama's budget avoided the painful choices put forward by the commission on benefit programs. Lew said it would be a mistake to say the report did not have an impact on the president's proposals.

He cited a proposal to pay for keeping doctors' payments under Medicare from being cut sharply. Instead of borrowing the money to prevent those cuts, the administration was putting forward $62 billion in savings in other areas to prevent those cuts over the next two years, Lew said.

In addition, the administration is reviving a proposal Congress rejected last year to limit tax deductions the wealthy can get for charitable donations, mortgage interest payments and state and local taxes, and using those savings to pay for keeping the Alternative Minimum Tax from hitting more middle-class families over the next two years.

Deficit will go down when tax cuts for rich are repealed

An administration official, who spoke on condition of anonymity before the budget was released, said one-third of the $1.1 trillion in deficit reduction the administration is projecting over the next decade would come from additional revenue with the bulk of that reflecting the limitations on tax deductions by the wealthy.

The administration has said that its five-year freeze will save $400 billion over the next decade with many programs slated for even bigger cuts. Community development block grants would be trimmed by $300 million, the government's program to help low-income people pay their heating bills would be cut in half for a savings of $2.5 billion, and a Great Lakes environmental restoration program would but cut by 25 percent to save $125 million, according to an Office of Management and Budget summary.

That document also said that the budget would cut the Pentagon's spending plans over the next decade by $78 billion with reductions in various weapons programs deemed unnecessary including the C-17 aircraft, the alternative engine for the Joint Strike Fighter aircraft and the Marine expeditionary vehicle.

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