Obama Budget Proposal: Cuts To Target Working Poor, Middle Class & Students (LIVE UPDATES)
WASHINGTON -- Less than two months after signing tax cuts for the wealthiest Americans into law, President Barack Obama proposed a spending plan to Congress that cuts funding to programs that assist the working poor, help the needy heat their homes, and expand access to graduate-level education, undermining the kind of community-based organizations that helped Obama launch his political career in Chicago.
Obama's new budget puts forward a plan to achieve $1.1 trillion in deficit reductions over the next decade, according to an administration official who spoke to the Associated Press on condition of anonymity in advance of the formal release of the budget.
Those reductions -- averaging just over $100 billion each year -- are achieved mainly by squeezing social programs. A deal struck to extend the Bush tax cuts for just two years, meanwhile, increased the deficit by $858 billion dollars. More than $500 billion of that bargain constituted tax cuts, with billions more funding business tax breaks and a reduction in the estate tax. Roughly $56 billion went to reauthorize emergency unemployment benefits.
The president's budget was expected to mostly target "non-defense discretionary spending," which makes up less than one-quarter of the overall budget, making balancing the budget with such cuts mathematically impossible.
Indeed, the driver of the deficit is tax cuts. The Wall Street Journal is reporting that as a result of the tax cut deal, the projected deficit in Obama's budget will reach a "record" level of $1.6 trillion this year, though that figure, relative to the size of the American economy, is far lower than many other governments around the world, according to data compiled by the Central Intelligence Agency. And the relative deficit is well below the levels of the 1940s, a time of economic prosperity. "President Barack Obama's 2012 budget proposal projects this year's deficit will reach $1.6 trillion, the largest on record, as December's tax-cut deal begins to reduce federal revenues, a senior Democrat said Sunday," the Journal reported Sunday evening. (The deficit is only a record if it is neither adjusted for inflation nor considered relative to the size of GDP.)
A closer look at surveys suggests that when people say they are concerned about the deficit, they are actually worried about the economy.
The president's official budget proposal was released Monday morning and we'll be adding updates with breaking news and reactions throughout the day.
Elise Foley reports:
Republicans have been quick to criticize Obama’s budget plan for doing too little to bring down the deficit. But so far, few have been willing to support proposals to eliminate subsidies for oil and gas companies -- even after a former big oil president said last week that major oil companies could do without them.
Democrats are targeting oil subsidies as a potential source of revenue as Republicans seek major cuts from social programs. Obama’s budget plan would eliminate roughly $4 billion in annual federal subsidies to oil and gas companies; Rep. Edward Markey (D-Mass.) introduced a bill last week to cut the subsidies by about $5 billion.
Although some Republicans have said they are open to looking at the subsidies, Sen. Jeff Sessions (R-Ala.) indicated some hesitation on Monday, telling reporters “it’s well worth looking at†but may not be worth the potential threat to energy independence. Supporters of the subsidies, including the oil lobby American Petroleum Institute, claim they are necessary to keep major oil companies operating in the United States.
As a senator from Alabama, many of Sessions' constituents benefit directly from oil subsidies.
“I’ve got to tell you, one of the most devastating events on the American economy is the slowing down dramatically of further production in our gulf,†Sessions said. “We need to make producing American oil more attractive than importing foreign oil because American oil creates jobs here and otherwise we’re sending our wealth abroad.â€
Elise Foley reports:
Republicans bashed the president's budget proposal on Monday, calling it a punt down the road for the nation's deficit and criticizing Obama for not including a plan to change the way the government deals with Social Security and Medicare. House and Senate Republicans said Obama's budget, which the White House said would cut the deficit by $1.1 trillion over the next decade, would actually lead to increased spending and more debt for the country.
"It looks like to me that this thing has about $8 of tax increases for every $1 of spending cuts," said Rep. Paul Ryan (R-Wisc.), chairman of the House Budget Committee. "You really cannot borrow and spend and tax your way to prosperity, but unfortunately that's what this budget does."
Read the full story here.
The Associated Press reports:
Defense Secretary Robert Gates says he is willing to settle for a smaller Pentagon budget this year than the administration originally requested, but insisted that the total -– not counting war costs -– cannot be less than $540 billion. That is about $9 billion less than the White House first requested.
Gates was referring to this year's budget, which has not been approved by the Congress. Instead the Pentagon has been required to stick to last year's spending level.
Gates said this requirement has been damaging and, if not fixed, may soon turn into a crisis.
Gates made his remarks while presenting the administration's defense spending proposal for the next budget year, which begins in October.
Arthur Delaney reports:
The Obama administration’s budget proposes a boost to state work-sharing programs that prevent layoffs by allowing workers to share the pain of the recession through reduced hours.
“To help employers keep workers on the job, the Budget will encourage States to expand use of short-time compensation,†the administration's budget says. “Also known as work-sharing, this voluntary employer program helps firms retain workers by reducing employees’ weekly hours instead of laying them off. Workers with reduced hours receive a partial unemployment check to supplement their reduced paycheck.â€
The administration would provide temporary federal funds for work-sharing benefits and encourage states to expand the programs, but Monday's budget did not provide details about how much money would be made available. The proposal may eventually resemble legislation introduced in previous sessions of Congress by Sen. Jack Reed (D-R.I.).
Kevin Hassett, a senior fellow with the conservative American Enterprise Institute who is a fan of work-sharing, told HuffPost in an email that the work-sharing proposal is “clearly the high point of an otherwise disappointing budget.â€
“It is nice to see the administration propose the expansion of existing work sharing programs,†Hassett wrote. “The unemployment rate is still high, and it is not too late to try some policy innovation in this space.â€
Only 17 states currently have work-sharing programs. They work like this: Instead of firing somebody, a participating business would have five employees work four-day weeks. The government would reimburse those workers for the fifth day with 20 percent of what they'd receive for a week in unemployment insurance benefits.
The program doesn't save money for state unemployment trust funds, but it can save jobs and prevent people from falling into permanent joblessness.
"It’s a very positive step that the administration is talking about providing incentives for states to enact these programs," George Wentworth, a policy expert with the National Employment Law Project, said. "They really do serve their purpose of averting layoffs."
The Associated Press reports:
Here are the spending levels proposed by President Barack Obama for each federal agency in his 2012 budget. All totals are in billions of dollars. Because Congress has not completed action on 2011 spending legislation, the administration used the president's 2011 budget request as the basis for the 2011 spending estimates for each agency.
Department; Total 2011; Total 2012; % Change From 2011.
Agriculture 147.8 145.6 -1.5
Commerce 9.2 10.4 13.9
Defense 772.1 727.4 -5.8
Education 49.1 68 38.5
Energy 31.2 27.2 -12.7
EPA 9.9 8.8 -11.2
Health and Human Services 895.6 886.8 -1.0
Homeland Security 43.5 44.3 1.8
Housing and Urban Development 55.9 47.2 -15.5
Interior 12.4 11.8 -4.4
Justice 32.6 31 -5.1
Labor 149.5 108.8 -27.2
State 74.2 73.6 -0.7
Transportation 76.5 128.6 68.1
Treasury 467.3 520.3 11.4
Veterans 123.4 129 4.5
Social Security 803.1 818.3 1.9
NASA 18.9 18.7 -0.9
Legislative Branch 4.8 5.2 6.9
Judiciary 7.3 7.6 4.3
Army Corps of Engineers 4.9 4.6 -6.1
Other Agencies 120.7 131.5 8.9
TOTAL 3,651 3,685 0.9
Laura Bassett reports:
President Obama’s 2012 budget managed to increase funding to homelessness assistance programs by $577 million, despite an overall cut of 2.5 percent to the Department of Housing and Urban Development. It did so at the expense of housing programs designed to preventhomelessness in the first place.
Although the housing crisis is far from over, HUD will have about a billion dollars less to spend on homelessness and housing programs in FY 2012 than it did the previous year. The Federal Strategic Plan to End Homelessness will receive an increase in funds that will allow it to assist approximately 78,000 new homeless families, but funds will be slashed for housing programs for seniors and the disabled, as well as for the Community Development Block Grant Program, which builds and rehabilitates affordable housing.
Jeremy Rosen, policy director for the National Law Center on Homelessness and Poverty, told HuffPost that in light of the affordable housing cuts, “it’s an open question†whether the newbudget will have “any net affect on homelessness.â€
“I think it's a rearranging of deck chairs on the Titanic, so to speak, because we're saying, ‘Okay, we're gonna provide a little bit more money to people who are homeless by taking it away from housing programs that stop people from falling into homelessness,'†he said. “We're obviously in a housing crisis, so a budget that cuts a billion dollars is not going to really make meaningful steps toward addressing that.â€
One program that was completely left out of HUD’s 2012 budget, the Homeless Prevention and Rapid Re-Housing Program, was already having trouble keeping up with demand in 2010, according to a recent NLCHP report.
The program, which helps keep people in their apartments by subsidizing their rent, will likely run out of money in most states before the end of 2011 without additional HUD funding.
“That’s a big loss, because this is a program that’s been working and that’s greatly needed,†said Maria Foscarinis, executive director of NLCHP. “The need hasn’t abated so it will just mean that fewer people will be helped.â€
Foscarinis told HuffPost she is disappointed in the Obama administration’s priorities.
“I'm disappointed in the administration and ultimately the president for not standing up for the needs of poor people and middle-income Americans who are suffering now in the this time of crisis. I think this is paying the price for having given the tax breaks to the people who didn't need them and for not speaking out in favor of sensible budget priorities.â€
Elise Foley reports:
One bright spot for refugee assistance in the president’s budget: Obama called for a $28 million increase in funding for refugee and entrant assistance, plus a $17 million increase for grants to non-governmental organizations that help refugees adjust to life in the United States. Current funding for refugees is dangerously low, which critics say shirks the government’s responsibility to take care of the suffering victims it accepts into the country.
The United States is authorized to admit up to 80,000 refugees for fiscal year 2011. As the United States has begun accepting fewer refugees, sources who work in refugee resettlement said the refugees who are accepted have experienced the worst of the worst: most have experienced major traumas or injuries, making it more difficult for them to fend for themselves once they enter the country.
The government provides funds directly for refugees’ first three months in the United States through the State Department, which would be given an additional $27 million under Obama’s budget for refugee admissions. Other funding increases would go to the Office of Refugee Resettlement, part of HHS, for entrant assistance and grants. Those grants provide long-term support for refugees, who must find work and become self-sufficient quickly to avoid homelessness when their government aid runs out.
The United Nations Refugee Agency estimated there were 10.3 million people in need for refuge worldwide at the beginning of 2011. Because many countries are cutting down on the number of refugees they accept each year, many people seeking refuge spend years -- even decades -- living in camps with little access to education and medicine.
Amanda Terkel reports:
President Obama's FY 2012 budget provides $939 million to "continue the expansion of VA services for homeless and at-risk veterans. These funds will combat veteran homelessness through collaborative partnerships with local governments, non-profit organizations, and the Department of Housing and Urban Development, the Department of Justice, and the Department of Labor."
In contrast, the Republicans' "continuing resolution" proposal would cut $75 million from a joint program with the Departments of Veterans Affairs (VA) and Housing and Urban Development (HUD) that offers housing vouchers to homeless veterans, effectively killing the program.
In a press release last week, House Appropriations Committee Ranking Member Norm Dicks (D-Wash.) criticized the elimination of this program:
The fact that this absolutely critical program was placed on a list of expenditures to be terminated in the Republican budget is indicative of how thoughtless and insensitive the process became after the most conservative members demanded further cuts in a budget that would already have caused tremendous harm and dislocation throughout the country.As long as there are veterans sleeping in shelters, cars, under bridges and on the streets, we have an obligation to continue to increase this voucher program.
According to a new analysis by the VA and HUD, "on a single night in January 2009, 75,609 veterans were homeless, and an estimated 136,334 veterans spent at least one night in an emergency shelter or transitional housing program between Oct. 1, 2008, and Sept. 30, 2009."
Elise Foley reports:
Amid the tumultuous revolutions in Tunisia and Egypt, Republicans have criticized President Barack Obama for failing to adequately support organizations that seek to foster democracy abroad. Obama's proposed 2012 budget gives those critics a fresh talking point, calling for further cuts to such programs.
Under Obama's proposal, released Monday, the State Department's Democracy Fund would be cut by 21 percent from its current $140-million appropriation, leaving it with $111 million for fiscal 2012. Subsidies for the National Endowment for Democracy, a private nonprofit that focuses on spreading democracy, would be cut by 12 percent, from $118 million to $104 million.
Read the full story here.
Zach Carter reports:
The budget plan released Monday by President Barack Obama includes two modest tax increases on large financial institutions and oil companies, along with hikes targeting the wealthiest Americans.
The budget projections included in the proposal would allow the Bush tax cuts on the wealthy to expire in 2013, with the estate tax returning to higher, 2009 levels. Obama renewed the Bush tax cuts, along with a low estate tax, in a December compromise with Congressional Republicans to extend unemployment benefits. The deal was estimated to increase the federal budget deficit by $858 billion, with just $56 billion of the total attributable to unemployment benefits. Obama has repeatedly insisted he will not allow the Bush tax cuts to be extended again in 2012.
The largest tax hike proposed for this coming year targets wealthy individuals. Obama hopes to raise about 1 percent of GDP, or roughly $150 billion, by limiting the amount that the rich can deduct from tax bills for things like charitable deductions and mortgage interest. This revenue would be used to provide a three year “patch†on the alternative minimum tax, or AMT. Patching the AMT prevents taxes from going up on the middle class. Congress typically passes a one-year patch every year.
Obama also remains committed to imposing a special tax on the nation’s largest banks, but has dramatically curtailed the scope of that tax. Under the plan, the yet-to-be-enacted bank tax would shrink from $90 billion to $30 billion.
Obama first proposed the bank tax in January 2010 as a way to recoup losses from the Troubled Asset Relief Program. The 2008 bailout law requires the president to put forward a proposal to recoup any losses from financial industry, but does not require Congress to adopt the proposal. In January 2010, the administration projected a shortfall of $114 billion under TARP, and Obama proposed a plan to bring in $90 billion over 10 years, with plans to extend the program longer to continue recouping funds.
Today, the administration projects a $46 billion loss on TARP, and is pushing a $30 billion tax. The tax would apply only to banks with $50 billion in assets or more.
Critics of TARP accounting emphasize that bank losses have been pushed into other programs, like rescue of Fannie Mae and Freddie Mac, plus new refinancing programs in the Federal Housing Administration and the Department of Veteran’s Affairs. The administration currently expects the Fannie and Freddie rescue to cost $73 billion through 2021.
Other proposals to impose heavier taxes on Wall Street have been ignored by the White House. One analysis from the Center for Economic Policy and Research found that a very small tax on trades of stock and derivatives would raise about $150 billion every year, even if trading volume declined substantially.
The administration has not seriously fought for the bank tax since Obama rolled out the proposal in January 2010. The plan briefly resurfaced last summer during the fight over the Wall Street overhaul, when Sen. Scott Brown (R-Mass.) balked at a plan that would require Wall Street to pay for the bill’s new, beefed up regulatory oversight. To keep progressives from revolting on a compromise with Brown, the Obama administration promised to pursue the bank tax.
Obama also hopes to eliminate roughly $4 billion in annual federal subsidies for oil and gas companies.
Elise Foley reports:
In a budget that calls for cuts for a number of social programs, the Obama administration showed a continued commitment to policing immigration by requesting funding increases for Homeland Security Department agencies that police immigration -- including a $263 million funding increase for Customs and Border Protection and an additional $55 million to Immigration and Customs Enforcement.
The decision to continue an already-steep increase of spending on immigration enforcement can be read as a surrender by Obama on immigration issues. Despite a promise to reform the immigration system within his first year, Obama has so far only amped up enforcement and border security in an attempt to woo Republicans for other reform efforts -- a strategy that proved unsuccessful when Senate Republicans voted down the DREAM Act last year. The Obama administration already set records for deportations, removing more than 390,000 undocumented immigrants last year.
With immigration reform efforts unlikely to pass in the next two years, the Obama administration’s budget calls for buckling down on enforcement by requesting even more funds agencies that detect and remove undocumented immigrants.
Most of the funding increase requested would be for security along the United State-Mexico border, which is already staffed at record levels. Obama requested funds for 21,370 additional Border Patrol agents and 300 new Customs and Border Protection officers to screen passengers and cargo. Other funding requested for Customs and Border Protection would go to technology along the border, a long-standing effort that so far has amounted to very little. The last push for an electronic border fence, an $1 billion initiative called SBInet, was scrapped in January.
Obama also called for a funding increase from $5.4 billion to nearly 5.5 billion for Immigration and Customs Enforcement. Part of this increase would go to an effort to expand E-Verify, a program that employers can use to check the legal status of their current and potential workers. That move could signal support for Republican proposals to make the program mandatory for all U.S. businesses, which critics say would maim the agriculture industry and drive undocumented workers underground.
One requested funding increase for immigration-related agencies would improve the system for immigrants by providing more assistance and programs to help the foreign-born learn English and pass citizenship tests. The budget calls for a $130 million increase to funding for U.S. Citizenship and Immigrant Services from 2010 levels.
Ryan Grim reports:
The Drug Enforcement Administration takes a bit of a whack in the president’s budget, seeing its spending level trimmed from $2.05 billion to $2.012 billion. While it’s a negligible cut, the downward trajectory indicates waning influence for the DEA.
Federal prison spending, meanwhile, will rise from $6.2 billion to $6.8 billion.
The investment in locking people behind bars is tremendously higher than what the president proposes to spend on diverting nonviolent offenders from prison by investing in drug and mental health courts. The budget offers a total of just $187 million for programs that help prisoners re-enter society and for “drug, mental health, and other problem-solving courts,†according to the budget. The latter’s slice of the $187 million pie is only $57 million.
Elsewhere in the budget, the president proposes to emphasize diverting nonviolent offenders from incarceration and easing overcrowding by building yet another prison in Alabama.
Successful investigations lead to arrests, prosecutions and convictions—often resulting in incarceration. The Administration proposes $8.4 billion for the operations of the Office of the Federal Detention Trustee and the Bureau of Prisons, and will help stabilize the prison population by advancing evidence- based sentencing reform legislation. The Administration will continue to explore fiscally-sound, data-driven administrative procedures to address population stress on the prison system such as expanded use of alternatives to incarceration, increased reliance on risk assessments, and diversion for non-violent offenders. In addition, drug treatment and prisoner re-entry programs will be expanded to enhance returning prisoners’ prospects for successful re-entry. Prison overcrowding also will be addressed through the activation of a newly constructed prison at Aliceville, Alabama, which will add more than 1,750 beds.
Amanda Terkel reports:
One notable absence from cuts in President Obama's FY 2012 budget is the Title X program. In fact, his budget would fund it at $327 million.
Republicans have made getting rid of this family planning funding a top priority. The House Appropriations Committee last week announced that it would be cutting $327 million from the program, which would effectively wipe it out. In FY 2011, Title X received $317 million.
Rep. Mike Pence (R-Ind.) has also introduced legislation to "deny Title X funds to Planned Parenthood or any other abortion provider."
The House is expected to vote this week on a continuing resolution that would cut Title X funding.
Sam Stein reports:
The process of passing a budget is one of the most contentious and sensitive political acts that a White House undertakes. And while a good chunk of the effort involves pinpointing the benefits and costs to a huge swath of expenditures, an equally difficult task involves selling the proposal.
On the Hill, Monday morning, Democratic leadership began circulating the following talking points to help with the latter function.
The President’s budget is designed to strengthen our nation, invest in the future, help create jobs and grow our economy, while reducing the deficit by $1.1 trillion. We agree with the President that we must out-innovate, out-educate, and out-build the rest of the world.Republicans will bring legislation to the floor this week that cuts jobs, threatens American innovation, hampers our global competitiveness, and diminishes investments in rebuilding America.
· The GOP spending bill harms the people hurting most: middle class families, students, seniors, and veterans.
· The GOP proposal ends construction projects to rebuild our nation, costing good paying American jobs; halts innovation and disease research; and takes cops off the street, making our neighborhoods less secure
Democrats are committed to living within our means, while investing in the future and cutting the deficit. Instead Republicans have proposed policies that will add $5 trillion to the deficit, and have not presented a serious plan for actually addressing the deficit.
Democrats will continue to measure every effort by whether it creates jobs, strengthens the middle class, and reduces the deficit.
Shahien Nasiripour reports:
The Obama administration reversed course Monday, forecasting slower growth and higher unemployment over the next two years in an implicit acknowledgement that the economy continues to suffer, according to its spending plan for 2012.
In prior budgets, the administration had projected robust growth and a lower unemployment rate for 2011 and 2012, giving the nation the impression of a rosy economic expansion and coloring its projections for tax revenue and government spending.
But in its latest spending plan, the White House revised those forecasts.
It now projects growth at a 2.7 percent rate this year, more than a full percentage point lower than last year's budget when it estimated 3.8 percent growth. For 2012, the administration forecasts 3.6 percent growth, considerably lower than its previously projected 4.3 percent clip.
The unemployment rate reflects the grim projections.
This year, the White House estimates that 9.3 percent of workers will be jobless. Last summer, in its mid-year budget update, the administration forecast a 9.0 percent unemployment rate. Next year, when President Barack Obama runs for reelection, the administration forecasts an 8.6 percent unemployment rate, a half-percentage point increase from last summer's projection of 8.1 percent. The White House also raised its projection for the unemployment rate in 2013.
The unemployment rate has never averaged above 8 percent during a presidential election year, according to Labor Department data stretching back to 1948.
Amanda Terkel reports:
President Obama's FY 2012 budget provides $553 billion for the Defense Department's baseline budget. Overall military spending, including funding for the wars, would drop by 5 percent compared to the FY 2011 request. Pentagon spending would drop by $78 billion over the next five years, in line with cuts that Defense Secretary Robert Gates has recommended, and increase with inflation thereafter.
The President is requesting $118 billion for the DoD in Overseas Contingency Operations (OCO) funding for Iraq and Afghanistan -- a separate amount, over and above the department's baseline budget. Because of the withdrawal of U.S. troops from Iraq, the funding requested is significantly lower than the FY 2011 request:
- Provides $118 billion for the Department of Defense, of which $107 billion is for Operation Enduring Freedom that supports activities in Afghanistan and $11 billion for Operation New Dawn (formerly Operation Iraqi Freedom) that supports activities in Iraq.
-Funds $8.7 billion for the Department of State, of which $2.2 billion is for Afghanistan, $1.2 billion is for Pakistan, and $5.2 billion is for Iraq. The increase associated with the Department of State is more than offset by reduced costs for the Department of Defense.
This budget includes State Department funding as part of OCO, which is a break with what administrations have done in the past, as the Office of Management and Budget touts in the document: "Beginning with the 2012 Budget request, certain temporary and extraordinary Department of State diplomatic, development, and related assistance in Iraq, Afghanistan, and Pakistan will likewise be requested as OCO and be similarly funded. This approach improves budget transparency and fiscal discipline by extending the separate OCO mechanism to related international affairs spending in these countries, particularly as operations transition from military civilian leadership."
Meg Reilly, a spokesperson for the Office of Management and Budget, pointed out that the fact that the war costs are included in the budget is different to the approach of what was done during the Bush administration.
"Under the Bush Administration, war funding was always done through supplemental appropriations measures which obfuscated the true cost of these operations," said Reilly in a statement to The Huffington Post. "This Administration has consistently included the extraordinary costs associated with funding military operations in Iraq and Afghanistan through a separate Overseas Contingency Operations (OCO) budget request for the Department of Defense (DOD), thus making it transparent and clear what these operations cost and their impact on our fiscal situation."
A Democratic House staffer noted out that the inclusion of OCO funding in this budget, however, doesn't preclude Obama from requesting supplemental funding down the road. So far, he has asked for two supplementals to pay for the "surges" in Afghanistan -- one each year he's been in office -- although they were, arguably, unforeseen costs. No supplemental requests are in the FY12 budget, whereas the FY 2011 budget did have a supplemental funding request of $33 billion. Still, however, it's not a guarantee that there won't be one this year.
"One year of Afghanistan funding would more than cover the $100 billion that the GOP is taking out of the EPA, the NIH, the Center for Disease Control, Women Infants and Children program, Social Security, etc," added the staffer.
David Rogers at Politico also points out, "Afghanistan's prominence has also seen growing investments in the unmanned drones so important to that war. An estimated $1.7 billion is requested for three of the high-altitude Global Hawks built by Northrop Grumman, and a total of $2.4 billion would buy 84 drones from General Atomics: 48 of the Reaper model and 36 of the Grey Eagle."
Arthur Delaney reports:
President Obama’s budget proposal for fiscal 2012 follows through with plans to slash funding for the Low Income Home Energy Assistance program, as HuffPost reported last week.
The program provided $5.1 billion to help poor folks stay warm in 2009. The Obama budget would reduce funding to $2.57 billion, a cut that the program’s advocates estimate could leave 3.5 million households hanging.
"Obama was supposed to have this image that he was for the everyday person," said Karrin Herring, a resident of Beaver County, Pa. who received $300 for her heating bill from LIHEAP in the fall. “It helped me out and I was glad to get it, too.â€
Herring, a 56-year-old middle school registrar disabled with avascular necrosis in her knees, said she's still in the president's corner, despite her frustration over LIHEAP.
"For him to go straight to a program like this, especially when there are so many unemployed people out here now, a lot of times through no fault of their own, and more people needing the LIHEAP, I just couldn't understand why he would even think about this program in particular.
They can find someplace else to cut some money if they really wanted to."
Sam Stein reports:
Throughout the crafting of health care legislation, reform proponents had one constant complaint. As lawmakers looked for ways to cut costs or save money, the Congressional Budget Office, the scorekeeper of legislation, refused to acknowledge the full savings to be gained from investments in wellness and prevention programs. The final bill did, in the end, include an unprecedented investment: $15 billion over 10 years. But true believers in the efficacy of preventative care weren’t satisfied. Nor, does it appear, was the White House. In the president’s FY2012 budget, $1 billion of the prevention funds within the Affordable Care Act are allocated for “activities that have demonstrated improved health outcomes and will help reduce health care costs.†In addition, the president proposes establishing a new “Baby Friendly Hospital Initiative to promote breastfeeding†-- an expenditure that seems destined to produce snide jeers from conservative critics.The emphasis on preventative services doesn’t end there. The budget also calls for $47 million to reduce healthcare-associated infections. Within the Substance abuse and Mental Health Services Administration, the administration allocates $535 million for programs that target “early risk factions that can improve behavioral health outcomes for children and young adults.†The budget also supports a new $10 million initiative to “increase access to mental health and substance abuse prevention, treatment, and recovery services†for military members returning from overseas -- a nice investment but a total that will, in all likelihood, fall well short of addressing the ramifications of lengthy deployments.
David Rogers, who's been covering Congress for more than 30 years and has a better understanding of the budget than most of the staffers who put it together, says that Obama's "numbers read less like a budget than a soldier deciding what he must carry and what will weigh him down too much when he jumps into a hot landing zone. And that’s very much where Obama is: jumping into a Congress that is its own hot LZ, where House Republicans and their tea party allies are already tearing up his 2011 budget, let alone his new ideas for the year ahead."
Obama, says Rogers, "bets big on education spending — an 11 percent increase next year — while altering the Pell Grant program to try to save the aid levels now allowed for college students from the poorest families. The National Institutes of Health would grow by about $1 billion, even as old anti-poverty programs and heating assistance would be cut. And $62 billion in Medicare savings would be plowed back into paying physicians who care for the elderly."
Arthur Delaney reports:
The White House’s budget message doesn’t embrace any recommendations for Social Security reform from President Obama’s National Commission on Fiscal Responsibility and Reform. The deficit commission, as it is colloquially known, recommended raising the retirement age and altering the benefit formula in such a way that would tilt the program toward more of a welfare model.
The White House put forward six principles for Social Security reform, none of which suggest benefit cuts of any kind. In fact, one of the six actually rules out cuts: “While all measures to strengthen solvency should be on the table, the Administration will not accept an approach that slashes benefits for future generations.â€
Social Security's actuaries say the old-age and disability insurance program can pay full benefits until at least 2037, at which point income from payroll taxes would be sufficient to pay nearly four-fifths of benefits through 2084.
The budget suggests Congress follow the example of the Greenspan Commission, which in the early 1980s shored up a Social Security shortfall by trimming benefits and raising taxes.“The President believes that we should come together now, in bipartisan fashion, to strengthen Social Security for the future,†the budget message says. “He calls on the Congress to follow the example of great leaders in the past – such as Speaker Thomas P. O’Neill Jr. and President Ronald Reagan -- and work in a bipartisan fashion to strengthen Social Security for years to come.â€
Here are the six principles:
1. Any reform should strengthen Social Security for future generations and restore long-term solvency.
2. The Administration will oppose any measures that privatize or weaken the Social Security system.
3. While all measures to strengthen solvency should be on the table, the Administration will not accept an approach that slashes benefits for future generations.
4. No current beneficiaries should see their basic benefits reduced.
5. Reform should strengthen retirement security for the most vulnerable, including low-income seniors.
6. Reform should maintain robust disability and survivors’ benefits.
One element of the president’s budget cutting plan that is likely to win fans on his side of the aisle is a plan to eliminate 12 tax breaks enjoyed by oil, gas and coal companies. It’s estimated to save $46 billion over the next decade. Those gains will be directed at an effort to put a million electric cars on the road by 2015, double the share of electricity coming from clean sources by 2035, and reducing buildings’ energy use by a fifth by 2020.
White House OMB chief Jacob Lew told CNN that the budget is full of tough choices and defended the proposed cuts to home heating aid.
“It's a program that's done an enormous amount of good to help people pay their bills. But in 2008, the reason it doubled from $2.5 to $5 billion was because of a rapid spike in energy prices and it was a way of addressing the fact that energy prices had gone up to a very, very high level,†Lew said.
“Energy prices now are much more in line with where they were in 2008 before that price increase. And you know, we looked at the budget and we said we can't just level off at the new funding level,†he added.
In a roundup of the proposal's critics, the Washington Post notes that the Democratic chairman of the fiscal commission, Erskine Bowles, isn't satisfied with the cuts, saying it goes "nowhere near where they will have to go to resolve our fiscal nightmare."
WASHINGTON (AP) – President Barack Obama is sending Congress a $3.73 trillion spending blueprint that pledges $1.1 trillion in deficit savings over the next decade through spending cuts and tax increases.
Obama's new budget projects that the deficit for the current year will surge to an all-time high of $1.65 trillion. That reflects a sizable tax-cut agreement reached with Republicans in December. For 2012, the administration sees the imbalance declining to $1.1 trillion, giving the country a record four straight years of $1 trillion-plus deficits.
Senior administration officials say Obama would achieve two-thirds of his projected savings through spending cuts that include a five-year freeze on many domestic programs. The other one-third of the savings would come from tax increases, including limits on tax deductions for high-income taxpayers.
Even before Obama's new budget for 2012 was unveiled on Monday, Republicans were complaining that it did not go far enough. They branded Obama's budget solutions as far too timid for a country facing an unprecedented flood of red ink that has pushed annual deficits to all-time highs above $1 trillion.
HuffPost's Arthur Delaney reports:
Community service block grants, which fund community organizers in poor neighborhoods, are also facing cuts. During the 2008 campaign, Obama emphasized that his own resume included a stint as a community organizer. White House budget director Jacob Lew said in a New York Times op-ed Sunday that Obama would propose cleaving block-grant allocations to $350 million from $700 million."These are grassroots groups working in poor communities, dedicated to empowering those living there and helping them with some of life's basic necessities," Lew wrote. "These are the kinds of programs that President Obama worked with when he was a community organizer, so this cut is not easy for him."
David Bradley, director of the National Community Action Foundation, that works with Congress and local governments on behalf of programs for low-income people, said he was surprised that the president, a former community organizer, would go after programs that represent such a tiny part of the massive federal budget.
"The question is why? Why pick on this program? It makes a statement, particularly when you're able to say, 'Here's a program I really care about,'" Bradley said. "Once the Obama administration throws a poverty program in the water, it starts a feeding frenzy." Bradley said the the White House has thrown chum into the waters swirling around the budget-cut debate. He said the Obama administration's move simply emboldened Republicans to propose even deeper cuts to the same programs.
In an interview on CNN's "State of the Union" on Sunday, Office of Management and Budget Director Jacob Lew said that interest on graduate school loans will begin building up while students are still in school. Currently, interest does not begin compiling until after students graduate.
Host Candy Crowley questioned Lew about whether this would make graduate school less accessible for many Americans:
WATCH:
CROWLEY: Here's the problem, I guess. If you are a graduate -- let's take one of your examples. You're a graduate student; you are, right now, getting loans. You don't have to pay those loans or any interest on them until you graduate. But now you have to pay -- or it accumulates, I'm assuming -- you have to pay interest beginning on day one of grad school, and that makes it so that you can't go to grad school.LEW: Well, let's just be clear. Interest will build up, but students won't have to pay until they graduate. So it will increase the burden for paying back the loans, but it will not reduce access to education. That's, I think, part of how you can responsibly have a plan that deals with the challenge of solving our fiscal crisis, getting out of the situation where the deficit is growing and growing, but also investing in the future.
Lew's assurance that students still won't have to start paying back their debt until after they graduate might not offer much comfort to people who emerge from graduate school and face, on average, more than $40,000 in debt, according to FinAid.org. Students pursuing a medical degree can face more than $100,000 in debt, notes HuffPost's Amanda Terkel.
Obama himself has acknowledged the burden of heavy student debt, saying in his 2010 State of the Union speech, "In the 21st century, the best anti-poverty program around is a world-class education. No one should go broke because they chose to go to college."
In the past week, the Obama administration has signaled that it will propose significant cuts to community service block grants and an energy assistance program that helps poor people stay warm in the winter and cool in the summer.
A White House source familiar with the budget process told HuffPost that the president will propose cutting $2.5 billion from the Low Income Home Energy Assistance Program, or LIHEAP, which received $5.1 billion in federal funds in 2009. That program distributes money to states, which then distribute it to social service agencies to help families heat or cool their homes.
The National Energy Assistance Directors' Association, a group that represents state aid officials in Washington, said Wednesday that the bad economy has forced more low-income households to rely on LIHEAP. About 8.3 million households used it in fiscal 2010, up from 7.7 million and 5.8 million during the previous two years, and the association expects eligible applications to rise to 8.9 million this year. NEADA director Mark Wolfe told HuffPost that the administration's proposal would cut off 3.5 million households.
"It's just a cruel proposal," Wolfe said. "What this would do is take some of the most vulnerable families in the country off energy assistance."
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First Posted: 02/13/2011 10:55 pm Updated: 05/25/2011 6:30 pm