Obama lays out his budget. Budget fight to begin now.

[SirNitram]

Link

President Obama rolled out a $3.7 trillion budget blueprint Monday that would trim or terminate more than 200 federal programs next year and make key investments in education, transportation and research. The plan is aimed at boosting the nation's economy while reducing record budget deficits.

In a news conference at a Baltimore County middle school, Obama cast the document as a responsible alternative to the deep spending cuts that Republicans will urge in a vote this week on the House floor. Obama's plan would trim domestic spending by hundreds of billions of dollars over the next decade, striking hard at programs long favored by Democrats to make room for targeted increases in energy and medical research, corporate research and development and a new network to bring high-speed Internet access to 98 percent of Americans.

However, Obama also would rely heavily on new taxes, to a degree unacknowledged by administration officials in recent days. His budget request calls for well over $1.6 trillion in fresh revenue over the next decade, much of it through higher taxes on the wealthy and businesses.

Households with income of more than $250,000 a year would immediately see new limits on the value of their itemized deductions. And starting in 2013, they would lose the lower tax rates and other breaks that were enacted during the George W. Bush administration and recently extended.

The president proposes to hit businesses with an array of proposals he has offered in the past, including an end to subsidies for oil and gas companies, new taxes on hedge fund managers and a $30 billion fee on financial institutions aimed at repaying taxpayers for the federal TARP bailout.

The cuts target defense, heating assistance and community development grants and include a scale-down of the Pell grant program for college and vocational students.

The announcement was Obama's opening argument in what is likely to be months of debate with congressional Republicans who want to see deeper cuts.

He cast the reductions as necessary but also said that more funding for scientific research, innovation and education were essential to keep American competitive with other nations.

"It would mean cutting things that I care deeply about," Obama said. "But if we're going to walk the walk when it comes to fiscal discipline, these kinds of cuts will be necessary,"

He said that "while we are absolutely committed to working with Democrats and Republicans to find further savings ... we can't sacrifice our future in the process."

Obama described his education initiatives as "investments in the future" and said he would fight for more funding.

Although Obama seeks an overhaul of the corporate tax code to lower the 35 percent rate on corporate profits, his budget does not make that costly adjustment. Instead, it offers previous proposals to eliminate tax breaks for corporations that do business overseas, reaping $129 billion in new revenue through 2021.

Obama also directs Congress to develop a plan to pay for a new, multi-year transportation bill, a measure traditionally funded by increasing the federal tax on gasoline. "Bipartisan financing" for the transportation trust fund is likely to add another $328 billion to the revenue tally, raising total tax hikes in Obama's budget request to nearly $2 trillion through 2021.

The request drops one major proposal from previous budgets: Obama's plan to develop a system of tradeable vouchers for greenhouse gas emissions. The measure, which passed the House, came under fierce attack from the GOP and the industry and was never taken up by the Senate.

Obama's deficit-reduction strategies would do little to improve the immediate budget outlook. Obama projects that the deficit will hit a record $1.6 trillion this year - which, at nearly 11 percent of the economy, would be the largest since World War II. The bigger wave of red ink is caused in part by the recent bipartisan tax deal, which reduced payroll taxes this year for virtually every working American.

The annual deficit would recede to $1.1 trillion next year, as Obama's latest policies began to take effect - the fourth straight year of trillion-dollar deficits. Obama projects that the deficit would fall rapidly thereafter, settling around $600 billion a year through 2018, when it would once again begin to climb as a growing number of retirees tapped into Social Security and Medicare.

All told, Obama estimates that the nation would have to borrow an additional $7.2 trillion through 2021 under his policies, an improvement from previous projections that exceeded $9 trillion. His plan calls for annual deficits - and therefore annual borrowing - to stabilize at about 3 percent of the economy for much of the decade. The national debt would then level off at about 76 percent of economy, nearly double the debt burden the nation carried before the recent recession.

However, those figures are based on the assumption that the economy will grow 4 percent in 2012 and 4.5 percent in 2013 - well above most private and governmental projections.

Obama said the document represents a pivot toward fiscal responsibility after two years of increased spending to stabilize the ravaged economy.

"Now that the threat of depression has passed, and economic growth is beginning to take hold, taking further steps toward reducing our long -term deficit has to be a priority, and it is in this budget," Obama wrote. "We will not be able to compete with countries like China if we keep borrowing more and more from countries like China."

But Republicans blasted the document as a bait-and-switch, saying it fails to live up to recent assertions by White House budget director Jacob Lew that Obama would reduce deficits primarily by cutting spending.

"What we have here is a total abdication of leadership and talking points based on gimmicks and cooking the books," House Budget Committee Chairman Paul Ryan (R-Wis.) said in an interview. "To me, it's more than disappointing. I expected more taxes, but I also expected some serious spending controls or reforms, and we're getting none of it."

Although the budget request offers an important glimpse of the president's priorities - his first since Republicans regained control of the House in November - it is unlikely to have much influence in the budget debate on Capitol Hill. House Republicans plan to offer their own spending proposal for fiscal 2012, after attempting to push through sharp and immediate cuts to spending this year.

Democrats, who control the Senate, have vowed to block the GOP cuts, setting the stage for a battle that could shut down the government unless the two sides can agree by a March 4 deadline. For next year's budget, Senate Democrats are more amenable to Obama's approach. But they, too, are pursuing a bolder budget strategy in hopes of striking a bipartisan compromise that would go further to solve the nation's long-term problems.

"If we're going to get this debt down to a level that's sustainable, then we've got to do substantially more than $1 trillion worth of deficit reduction in the next decade. We just do," said Senate Budget Chairman Kent Conrad (N.D.).

A senior administration official said Obama's budget request maps "a sustainable path" that would stabilize government finances in preparation for a broader debate about how to tackle the biggest drivers of future deficits: Social Security and health care for the elderly, as well as a tax code that offers more in breaks and deductions than it collects in revenue.

Obama's budget makes clear that he will not take the lead in that debate: It contains no specific recommendations for tax or entitlement reform.

Senior administration officials pointed to two significant changes that would improve the budget outlook by eliminating long-standing gimmicks Congress has used to hide the true depth of the red ink. The first would cover the cost of adjusting Medicare to ensure that payments to physicians are not subject to steep reductions. The second would pay for adjustments to the alternative-minimum tax to prevent it from striking deep into the middle class over the next three years.

And with Republicans unwilling to consider changes in tax policy as part of their deficit-reduction effort, Obama challenges them to reconsider. If Congress would permanently fix the AMT, or pay for its provisions, after 2014, the nation's debt would start to shrink as soon as 2015.

The budget plan offers challenges for Democrats, as well. With voters clamoring for less spending, Obama is proposing cuts that many of his colleagues in Congress will find painful, lawmakers said.

A five-year freeze on domestic programs would reduce spending in that category to the lowest level, measured against the economy, since President Dwight D. Eisenhower left office in 1961. Half of all agencies would see their budgets reduced.

Among the cuts: Community development block grants would lose $300 million; low-income heating assistance would be sliced in half; a Great Lakes Restoration initiative would lose 25 percent of its funding; $1 billion would be cut from large airport grants and nearly $1 billion would be trimmed from a fund that finances water treatment plans and other infrastructure projects.

Nearly 40 duplicative or inefficient education programs would be condensed into 11, and 13 more would be eliminated. Sixty duplicative transportation programs would be consolidated into five, and limited to making investments only if Congress agrees on a financing plan that would not increase the deficit.

The Pentagon would also take a hit of $78 billion over the next five years, and defense spending would increase only for inflation thereafter. Combined with the drawdown in Iraq, overall military spending would be cut by 5 percent in 2012, compared with Obama's fiscal 2011 request.

On Sunday, a senior White House official pointed to a trade-off that he called emblematic of the administration's efforts: a plan to scale back portions of the Pell grant program, a key initiative of the Obama administration, to cover the growing cost of providing a maximum $5,550 benefit to more than 9 million eligible students.

Republicans attacked the blueprint based on early reports, saying it would do too little to satisfy the public hunger for smaller government.

"The president talks like someone who recognizes that spending is out of control, but so far it hasn't been matched with action. And his only solution to one of the most significant problems facing our country is to lock in spending at levels we all know are completely unsustainable," Senate Minority Leader Mitch McConnell (Ky.) said in a statement. "Americans don't want a spending freeze at unsustainable levels. They want cuts, dramatic cuts."

Democrats defended the president.

Obama's budget blueprint "strikes the right balance, offering tough cuts in a responsible manner," said Rep. Chris Van Hollen (Md.), the senior Democrat on the House Budget Committee. "Compared to the slash-and-burn Republican approach, this budget positions the president as offering a responsible approach to deficit reduction."

Naturally, McConnell immediately threw his 'Americans agree with me, and never disagree' rote statement. It is, however, a much needed attempt to restore taxes. You know, that crazy revenue stuff.

[Knife]

That's the real fight, I think. GOPers have actually been framing the fight as deficits for a while now, spending as their hill they want to die on. But, we know there are two factors here, spending and income. I'm not sure the dems have enough clout to bring revenue back into sanity and will fight any substantive spending cuts. Really the whole system is so fucking far out of whack, I doubt anything besides political posturing will be done.

[Thanas]

Obama already conceded the revenue fight when he got the Bush tax cuts extended.

[Stravo]

Obama already conceded the revenue fight when he got the Bush tax cuts extended.

Agreed.

What I find disheartening is the cuts in infrastructure listed above. One of the big points from a few years ago when bridges started falling into rivers was the horrofic state of the American infrastructure. If anything was going to be a booster for jobs it was a huge public works initiative like the New Deal to restore some of that infrastructure. I guess that's pie in the sky now. While I can see the need to invest in things that will help us stay ahead I don't think you can take great strides forward if the foundation you're working from is crumbling around you.

[Uraniun235]

Among the cuts: Community development block grants would lose $300 million; low-income heating assistance would be sliced in half; a Great Lakes Restoration initiative would lose 25 percent of its funding; $1 billion would be cut from large airport grants and nearly $1 billion would be trimmed from a fund that finances water treatment plans and other infrastructure projects.

This is absolutely loathsome and offensive.

Also supposedly there are cuts to the IRS in there, I don't even know how the fuck that gets rationalized when last I heard they were already underfunded.

[JME2]

One of the big points from a few years ago when bridges started falling into rivers was the horrofic state of the American infrastructure. If anything was going to be a booster for jobs it was a huge public works initiative like the New Deal to restore some of that infrastructure. I guess that's pie in the sky now. While I can see the need to invest in things that will help us stay ahead I don't think you can take great strides forward if the foundation you're working from is crumbling around you.

Symbolic and literal crumbling of America -- hate to be cynical, but it's true.

[MKSheppard]

This is absolutely loathsome and offensive.

No, what's loathsome and offensive is that NASA's budget remains at the level it was in 2010 -- $18.7 billion, while Obama is giving the Department of Education a 22% increase over 2010 levels, among others.

The Low Income Home Energy Assistance Program (LIHEAP) currently enjoys $5.1 billion in funding, but under the new budget it would be cut to $2.5 billion.

Hey; wait a minute. $5.1 billion a year lets us fund NASA's heavy lift vehicle -- it's supposed to cost only $15 billion, about three years of LIHEAP.

[Duckie]

Poor people freezing to death in the cold, and Shep rants about how we shouldn't care as long as missiles and rocketry get their due (which is not the same as "it's an awful budget for space too", it specifically says "old ladies dying in the winter? the homeless? pfah".) .Why, it's another N&P thread on SDN!

My eery psychic powers predict he will evenually scoot off without any punishment for his sociopathy despite the slamming LionElJonson got for simply stating he passively didn't care about human suffering.

[MKSheppard]

Poor people freezing to death in the cold, and Shep rants about how we shouldn't care as long as missiles and rocketry get their due then will scoot off without any punishment for sociopathy. Why, it's another N&P thread on SDN!

Hi Duckie! You don't want to know what I'd cut to give SPACE [TM] their due. Like oh, $350 billion off the DoD budget so we can cut the deficit and also establish a MOON BASE [TM]. The military will have to just get along with NEW LOOK 2 [TM] on a 125,000 man US Army instead of the 450,000+ we have now.

[Duckie]

I'd support slashing the military down to Costa Rican levels and using it to pay for a functional society, personally, were it my country. And there'd probably be enough to spare on cool stuff like Space. But that's not what was said: what was said was "pfah, tiffle, who cares about those plebes :monocle:"

[Simon_Jester]

LionEl gets slammed for being a sociopath in no small part because he's also a cretin; too stupid to understand the difference between true and false claims even within his area of interest.

Shep gets slammed less frequently because he does at least know one thing, as opposed to knowing zero things. When he says "we could take the money and use it to build rockets," then by golly you could do that, even if only Shep would want to take that particular money and use it to build rockets.

But yeah, Shep, your latest stuff here is fucking retarded. While rockets are undeniably shiny, building rockets without funding public education is not a winning plan. Especially not if you have dreams of continuing to do rocket science when 2030 and 2040 roll around.

Ditto for building rockets rather than buying poor people heat in the winter. Having people freeze to death every winter is the kind of thing that happens in shitty countries, and when your country is shitty in some respects, the shit tends to spread.

You wanna take the money from the Iraqistan War and throw it at rockets, fine. You wanna tax multimillionaires more and throw the money at rockets, great. But taking the money from schools and poor people's heating budget is just plain stupid.

[Serafina]

This is absolutely loathsome and offensive.

No, what's loathsome and offensive is that NASA's budget remains at the level it was in 2010 -- $18.7 billion, while Obama is giving the Department of Education a 22% increase over 2010 levels, among others.

The Low Income Home Energy Assistance Program (LIHEAP) currently enjoys $5.1 billion in funding, but under the new budget it would be cut to $2.5 billion.

Hey; wait a minute. $5.1 billion a year lets us fund NASA's heavy lift vehicle -- it's supposed to cost only $15 billion, about three years of LIHEAP.

Shep, that's really, really retarded.

If you want a space program, you NEED very well educated scientists, engineers and whatnot. You will NOT get those without good public education. Look at the history of the space program - the space race was mostly won due to massive funding of public education.
The same applies to infrastructure.

There are many other budget point you could cut in order to fund NATO, and that does include the military. Or you could just increase taxes by a bit.


Semi-edit: Simon already said that (damn distractions), but it's a point worth repeating.

[Mr Bean]

I'm sure Sheppards going to be back in just a minute to purpose cutting all funds to the "Puppy dogs and poor diseased orphans" section in order to pay for more education people. Come on now people recongize when a point is being made and get off your outrage horse because you assume you know what Sheppard is thinking.

Besides look at the root cause
We have to give away 5.1 billion dollars in "free" money each year so millions of Americans so they can keep the heat on during winter. Might instead of JUST getting outraged about the fact that the programing is getting cut we can exam why that we have to have such program in the first place. Why is shit so fucked up that the US Goverment forced to give away billions to help Americans heat their homes?

[mr friendly guy]

Just a question as a non American.

If an individual American needed to balance the budget, a few years ago they would get a second or third job. I remember George W Bush praising a lady for working 3 jobs (ignoring for a moment why someone would need to work 3 jobs to make ends meat). This certainly increases income. However if the government needed to increase income / revenue they are slammed and shouts of cutting spending instead gets heard.

Why is this? Why can't the government do both, if thats what it takes? Why is increasing income for an individual ok, but when the government does it, its bad?

[fgalkin]

Just a question as a non American.

If an individual American needed to balance the budget, a few years ago they would get a second or third job. I remember George W Bush praising a lady for working 3 jobs (ignoring for a moment why someone would need to work 3 jobs to make ends meat). This certainly increases income. However if the government needed to increase income / revenue they are slammed and shouts of cutting spending instead gets heard.

Why is this? Why can't the government do both, if thats what it takes? Why is increasing income for an individual ok, but when the government does it, its bad?

Because it's taxing people, and taxation is theft and is evil.

Or so a certain segment of the population believes, anyway.

Have a very nice day.
-fgalkin

[Agent Sorchus]

The average opinion of americans is that the government is both not to be trusted and actually hostile to your own well being. It is stupid since the one thing that they trust the government explicitly with is military power, which is easier to turn against the population. Supposedly this is all in homage to the revolutionary war... but that is bullshit.

Consider in some parts of the US if an Affrican American or hispanic obviously has a high income they are either treated as stealing jobs from the good god fearing white folk or are doing illegal deeds to supplement their <rightfully> peasant/stavation level income. So in reality it is only if white folk are working harder to get the large income that it is respected.

[Bakustra]

I'm sure Sheppards going to be back in just a minute to purpose cutting all funds to the "Puppy dogs and poor diseased orphans" section in order to pay for more education people. Come on now people recongize when a point is being made and get off your outrage horse because you assume you know what Sheppard is thinking.

Besides look at the root cause
We have to give away 5.1 billion dollars in "free" money each year so millions of Americans so they can keep the heat on during winter. Might instead of JUST getting outraged about the fact that the programing is getting cut we can exam why that we have to have such program in the first place. Why is shit so fucked up that the US Goverment forced to give away billions to help Americans heat their homes?

Yes, the point is that Shep cares little for the suffering of others, but this is a time where he comes out and states that, since people like you will try to play it off as "oh he really didn't mean that space was so much more important than the idea of social welfare, no, he was just making a point". Well, here's my point, then: people who care more about NASA than about the poor ought to be put in concentration camps and used as slave labor for rocket assembly. Here, I'm making a horrific, nigh-psychotic statement, but don't worry, it's really a commentary on how people are willing to let people die for NASA but are unwilling to sacrifice their precious hides for the organization. Not to mention that he complains about DoEd, of all things, getting a budget increase.

As for the "root cause", things are so fucked up because we're capitalist. Syndicalism for life!

We have to have such a program because we don't have a single national utility service that incorporates electric, gas, and steam heating, for which we could directly provide free or minimal heating in winter for the impoverished. Instead, the maze of organizations means that they have to be subsidized so that people can be subsidized indirectly. As for why we have to subsidize the poor in the first place, well the only alternatives are anarchism and Marxist/neo-Marxist communism, which seek to eliminate class structures and thus poverty altogether. Alternatively, we could go for a guaranteed national income, but that is just a less humiliating and more comprehensive way of delivering welfare than the current system.

[Vympel]

LOL, this budget is a load of horseshit:-

Screw you, suckers!

[Simon_Jester]

I'm sure Sheppards going to be back in just a minute to purpose cutting all funds to the "Puppy dogs and poor diseased orphans" section in order to pay for more education people. Come on now people recongize when a point is being made and get off your outrage horse because you assume you know what Sheppard is thinking.

When he says "we could take the money from X and use it on Y" it's pretty goddamn obvious what he's thinking; if he's not thinking what it looks like he's thinking when he says that, he should be clearer, not expect us to read his graph-befogged, nuke-addled mind.

Besides look at the root cause
We have to give away 5.1 billion dollars in "free" money each year so millions of Americans so they can keep the heat on during winter. Might instead of JUST getting outraged about the fact that the programing is getting cut we can exam why that we have to have such program in the first place. Why is shit so fucked up that the US Goverment forced to give away billions to help Americans heat their homes?

Because the measures it would take to win the war on poverty by tackling actual root causes would cause the American right to... I can't come up with a good word for how hard they'd scream if they actually thought someone might do that. Patching up symptoms gets you fulminated about less on Rush Limbaugh.

[The Duchess of Zeon]

Hey Shep, would you agree to at least fully funding the tuition and books and other mandatory costs, for free, regardless of financial need, of all Engineers, Physicists, Chemists, Biologists, geologists, and materials science students so that you have better armour steels, better rockets, new research into powerful laser guns, better protection against chemical weapons and plagues and more accurate sourcing of crucial raw materials for the military? And would you be prepared to tax people to make that possible so that half of our professionals in those fields aren't Chinese and Indian nationals? Because by far the thing that's come to irritate me about conservatives is that they want to have their cake and eat it, and we can't have a strong military without a strong industrial-scientific complex, and current US republican policies are destroying what remains of that complex in the US.

[MKSheppard]

But yeah, Shep, your latest stuff here is fucking retarded. While rockets are undeniably shiny, building rockets without funding public education is not a winning plan. Especially not if you have dreams of continuing to do rocket science when 2030 and 2040 roll around.

We've shoveled tons and tons of money directly into education since the creation of the ED in 1979, and the average educational level of the US continues to lag well behind a lot of other countries, in many cases we are worse in overall general education than we were in the 1960s.

Giving the ED (yes, that is it's acronym) 22% more money in the 2012 budget than in it's 2010 budget will not solve this problem.

Likewise, giving the ED a flat budget out to whenever based on their 2010 budget will not catastrophically destroy the state of Education in the United States.

On the other hand, diverting that 22% budget increase over 2010 -- which is about $12.32 billion from my rough calculations -- to NASA will achieve far more than it would at the ED; like being able to fully fund about 80% of the developmental costs for a heavy space launcher; and also cause many high tech jobs which require education to be created, providing a market for said rocket engineers at various aerospace companies as they tool up.

As for supplying the rocket scientists? We can do that with slight increases to the ED baseline budget of 2010 targeted SPECIFICALLY at scholarship/grants for engineering/science majors.

But taking the money from schools and poor people's heating budget is just plain stupid.

Again the whining about schools and poor people. Let me post a quote from the 1970s from my QUOTEBOX:

NERVA II costs a billion plus. That can buy 375,000 schoolrooms. I know I'll be blasted back home because California gets fifty percent of the space contracts but how do I tell my people their kids can't have classrooms, but we're going to Mars. Adding the military, we're spending seven billion on Space. Can't we take a billion of it for domestic programs?.
--Representative Chester E. Holifield, D-CA

Imagine what we could have done if we had ignored the bleeding hearts and funded SATURN V/NERVA and other aspects of AAP?

No wait, it was all GRAPHED for us:

GRAPH

Imagine sending 52,000 pounds onto the Grand Tour, an event which only occurs every 174 years. Both Voyagers only massed 3,184 pounds together. Think how much better the flybys through the outer solar system could have been with bigger cameras, more on board power, higher datarates; and of course the possibility of dropping orbiters behind with that excess capability.

Imagine sending a 136,000 pound space station into lunar orbit. If you can get the ISP of the S-N stage up to 900, you can essentially send a complete SKYLAB (170,000~) pounds into lunar orbit. Imagine Pete Conrad orbiting the moon for 59 days.

And those are just the starting points of space exploration using nuclear thermal rockets atop a supremely reliable booster.

But we fucking threw it all away, when Nixon's budgetary axe swung on the space program and defense. Not one Great Society or Entitlement program suffered cuts in his proposed budgets.

Why is it that social programmes are somehow sacrosanct from budgetary cuts?

By the way; LIHEAP was begun during the Reagan administration. Isn't that enough?

Well, here's my point, then: people who care more about NASA than about the poor ought to be put in concentration camps and used as slave labor for rocket assembly.

Doesn't provide enough ISP.

We are confident that the secret project to breed unicorns and then slaughter them and use their horns as finely ground rocket propellant will enable a quantum leap in specific impulse.

[MKSheppard]

When he says "we could take the money from X and use it on Y" it's pretty goddamn obvious what he's thinking; if he's not thinking what it looks like he's thinking when he says that, he should be clearer, not expect us to read his graph-befogged, nuke-addled mind.

Some more info on this budget:

Link

Obama also laid out plans to conduct research on “mini-nukes". His budget sets aside $853 million for nuclear energy research. A White House fact sheet on the proposal says the research will focus in part on "mini-nukes," known as small modular reactors.

...

The budget request sets aside $5.4 billion for DOE’s Office of Science to conduct clean energy research. This includes $2 billion for basic scientific research, $457 million for solar research and $341 million for biomass research.

I like that set of priorities -- $853M for nuclear energy research for shitty little mini reactors; and $5.4B for clean energy research.

Of course, he also made noise about $36B more in loan gurantees for nuclear power plant construction, making about $54B the DOE has for that.

[adam_grif]

Shep, their point is that no amount of shiny space stuff is more important than educating the youth, getting the homeless back onto their feet and petting kittens. Obviously, there are some cuts we could make so that we could have our cake and eat it too (Iraqistan), but directly proposing that we should dig into the education budget to fund rocketships makes you look like a sociopath.

[Aaron]

Shep, their point is that no amount of shiny space stuff is more important than educating the youth, getting the homeless back onto their feet and petting kittens. Obviously, there are some cuts we could make so that we could have our cake and eat it too (Iraqistan), but directly proposing that we should dig into the education budget to fund rocketships makes you look like a sociopath.

Dude, he doesn't care. If you guys haven't figured out by now that Shep doesn't give a fuck or is trolling...well enjoy wasting your time.

[Shroom Man 777]

I'm sure Shep will be okay if cutting public education results in the next generation of Americans being fucking stupid, it's no big deal. Oh no, it won't in any way hamper the development of his pew-pew space stuff. After all, America and NASA can always get Nazi war criminals into the moon program to lead the way.