Obama budget: Some cuts, not the slashes GOP asks

President Barack Obama reaches to shake hands with 8th graders as he speaks at Parkville Middle School and Center of Technology, in Parkville, Md., Monday. AP Photo/Carolyn Kaster

Obama budget: Some cuts, not the slashes GOP asks

ANDREW TAYLOR, The Associated Press

WASHINGTON (AP) — Putting on the brakes after two years of big spending increases, President Barack Obama unveiled a $3.7 trillion budget plan Monday that would freeze or reduce some safety-net programs for the nation's poor but turn aside Republican demands for more drastic cuts to shrink the government to where it was before he took office.

The 10-year blueprint makes "tough choices and sacrifices," Obama said in his official budget message. Yet the plan, which sets the stage for this week's nasty congressional fight over cuts in the budget year that's already more than one-third over, steers clear of deeply controversial long-term problem areas such as Social Security and Medicare.

Counts on better economy, higher taxes

The budget relies heavily on the recovering economy, tax increases and rosy economic assumptions to estimate that the federal deficit would drop from this year's record $1.6 trillion — an astronomical figure that requires the government to borrow 43 cents out of every dollar it spends — to about $600 billion after five years.

Obama foresees a deficit of $1.1 trillion for the new budget year, which begins Oct. 1, still very high by historical benchmarks but moving in the right direction.

The president claims $1.1 trillion in deficit savings over the coming decade for his plan, a 12 percent cut from the federal deficits the administration otherwise projects. But that figure includes almost $650 billion in spending cuts and new transportation revenues the administration won't specify.

More money for education

Obama would trade cuts to some domestic programs to pay for increases in education, infrastructure and research as necessary investments that he judges to be important to the country's competitiveness in a global economy.

But he also raises taxes by $1.6 trillion over the coming decade, much of it from allowing recently renewed tax cuts for families making more than $250,000 a year to expire in two years — he signed a two-year extension of them into law just two months ago — and from curbing their tax deductions for charitable contributions, mortgage interest and state and local tax payments.

Despite his spending cuts and tax increases, the government's total debt would still mushroom from $14.2 trillion now to almost $21 trillion by 2016. Republicans assailed his blueprint for failing to take the lead on the nation's daunting fiscal problems.

GOP not impressed

"People vote for presidents because they want leadership," House Budget Committee Chairman Paul Ryan, R-Wis., said in an interview. "They expect presidents to take on the greatest challenges facing the country. Well, the biggest crisis we have is the debt, and he's doing absolutely nothing to get it under control."

While Obama's budget total of $3.7 trillion would be down slightly from this year's estimated $3.8 trillion, lower war costs and declining stimulus spending alone would account for a $90 billion drop.

A year after appointing a bipartisan commission to recommend ways to deal with the debt, Obama would bypass almost all of its painful prescriptions to cut huge benefit programs like Social Security and Medicare. But the president said he understood more must be done.

WASHINGTON (AP) — Putting on the brakes after two years of big spending increases, President Barack Obama unveiled a $3.7 trillion budget plan Monday that would freeze or reduce some safety-net programs for the nation's poor but turn aside Republican demands for more drastic cuts to shrink the government to where it was before he took office.

The 10-year blueprint makes "tough choices and sacrifices," Obama said in his official budget message. Yet the plan, which sets the stage for this week's nasty congressional fight over cuts in the budget year that's already more than one-third over, steers clear of deeply controversial long-term problem areas such as Social Security and Medicare.

Counts on better economy, higher taxes

The budget relies heavily on the recovering economy, tax increases and rosy economic assumptions to estimate that the federal deficit would drop from this year's record $1.6 trillion — an astronomical figure that requires the government to borrow 43 cents out of every dollar it spends — to about $600 billion after five years.

`Obama foresees a deficit of $1.1 trillion for the new budget year, which begins Oct. 1, still very high by historical benchmarks but moving in the right direction.

`The president claims $1.1 trillion in deficit savings over the coming decade for his plan, a 12 percent cut from the federal deficits the administration otherwise projects. But that figure includes almost $650 billion in spending cuts and new transportation revenues the administration won't specify.

`More money for education

Obama would trade cuts to some domestic programs to pay for increases in education, infrastructure and research as necessary investments that he judges to be important to the country's competitiveness in a global economy.

`But he also raises taxes by $1.6 trillion over the coming decade, much of it from allowing recently renewed tax cuts for families making more than $250,000 a year to expire in two years — he signed a two-year extension of them into law just two months ago — and from curbing their tax deductions for charitable contributions, mortgage interest and state and local tax payments.

`Despite his spending cuts and tax increases, the government's total debt would still mushroom from $14.2 trillion now to almost $21 trillion by 2016. Republicans assailed his blueprint for failing to take the lead on the nation's daunting fiscal problems.

`GOP not impressed

"People vote for presidents because they want leadership," House Budget Committee Chairman Paul Ryan, R-Wis., said in an interview. "They expect presidents to take on the greatest challenges facing the country. Well, the biggest crisis we have is the debt, and he's doing absolutely nothing to get it under control."

`While Obama's budget total of $3.7 trillion would be down slightly from this year's estimated $3.8 trillion, lower war costs and declining stimulus spending alone would account for a $90 billion drop.

`A year after appointing a bipartisan commission to recommend ways to deal with the debt, Obama would bypass almost all of its painful prescriptions to cut huge benefit programs like Social Security and Medicare. But the president said he understood more must be done.