2012 budget moves to cut federal spending

By Sam Butterfield


President Barack Obama released his 2012 budget proposal Monday, taking aim at trimming America’s multi-trillion-dollar deficit by freezing discretionary spending for the next five years.

Continuing to trumpet his message of “winning the future,” the President emphasized the necessity of investment in education, specifically in science and technology, and, in remarks Monday at a Maryland middle school, made his case for making innovation in business and technology a top national priority.

“Now that the threat of a 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,” the President said in his budget proposal.

The $3.7 trillion budget projects a total deficit of some $7.2 trillion by 2021, including about $1.1 trillion in deficit-reduction measures the President outlined Monday. Cumulatively, the proposal is illustrative of many of the themes of the Obama presidency; pushing spending in certain growth areas like education, technology and green energy and cutting from targeted areas which the government can no longer fund, as it attempts to pay off a continually growing debt. A large share of the budget, 16 percent, according to New York Times figures, is now going to paying off the nation’s creditors, both domestically and, increasingly, overseas.

In his appearance at Parkville Middle School and Center for Technology in Baltimore, flanked by Secretary of Education Arne Duncan and the director of the Office of Management and Budget, Jack Lew, the President continued to call for America to “out-innovate” the rest of the world to again help the country become the world’s foremost economic power.

“Over the last few weeks I’ve traveled the country, talking about what we need to do to win the future; talked about the need to invest in innovation, so that the next big idea is discovered here in the United States of America,” he said. “I’ve talked about the need to invest in high-speed rail and high-speed Internet, so that companies can move goods and information faster than ever. And this week, I’ll be talking about the need to invest in education – in places like Parkville – so that every American is equipped to compete with any worker, anywhere in the world.”

Where the President’s message broke from previous statements was in his call for a major overhaul of government spending and creating a target of reducing domestic spending to its lowest share of the budget since the 1950s.

“I’m also convinced that the only way we can make these investments in our future is if our government starts living within its means, if we start taking responsibility for our deficits,” he said. “As a start, I’ve called for a freeze on annual domestic spending over the next five years. This freeze would cut the deficit by more than $400 billion over the next decade, bringing this kind of spending – domestic discretionary spending – to its lowest share of our economy since Dwight Eisenhower was President.”

Obama acknowledged that reigning in spending will require cutting from some areas which direly need funding, including some programs for which he has been a staunch advocate.

“Even as we cut waste and inefficiency, this budget freeze will require some tough choices,” he said. “It will mean cutting things that I care deeply about – for example, community action programs in low-income neighborhoods and towns, and community development block grants that so many of our cities and states rely on. But if we’re going to walk the walk when it comes to fiscal discipline, these kinds of cuts will be necessary.”

Although Obama’s proposal is ambitious in seeking to cut into the burgeoning deficit, he made it clear that these cuts are only a “down payment,” and said hacking away at the colossal debt will require bipartisan cooperation and common sense fiscal prudence.

“Cutting annual domestic spending won’t be enough to meet our long-term fiscal challenges,” he said. “The only way to truly tackle our deficit is to cut excessive spending wherever we find it – in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.”

Obama also touched on some targeted areas his

administration is seeking to trim, including $78 billion in cuts to the Defense Department, a cessation of tax breaks “for oil and gas companies” and reforms to “wasteful health spending,” which the President said will be used “to make sure doctors don’t see their reimbursements slashed and that they stay in the system seeing patients.”

Ultimately, however, the President emphasized the need to create an economic climate within which the nation can flourish into the future. To accomplish this, he said, America must push forward in entrepreneurship and innovation, and in updating education policy to more prominently focus on science and emerging technologies.

“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,” he said. “Even as we cut out things that we can afford to do without, we have a responsibility to invest in those areas that will have the biggest impact in our future – and that’s especially true when it comes to education.”

Listing engineering and math as among the key areas in which he hopes to foster interest, the President touted a few initiatives his administration has undertaken to make some of those goals a reality.

“We’re spearheading a drive to prepare more than 10,000 new math and science teachers over the next five years, and train 100,000 more current teachers in those fields,” he said. “We’re pushing forward on a Race to the Top in our schools that has led over 40 states to raise their standards for teaching and learning for less than one percent of what we spend on education each year. That’s why we’re protecting the more than $800 increase that we added to the most widely used federal scholarships, and making the tough choices to put them on a firm footing for years to come. And that’s why we’re on track to meet the goal that I set when I took office: By 2020, America will once again have the highest proportion of college graduates in the world.”

The budget deficit for fiscal year 2011, according to the Office of Management and Budget, is $1.6 trillion. The 2012 proposal is expected to hedge that debt by more than $500 billion, in part because of economic growth, also, according to the President’s proposal, because of the last two years of stimulus funding, and especially because of the expiration of the Bush-era tax cuts. The budget office’s proposals show the deficit inching down under the trillion-dollar mark this year and falling to as low as $607 billion by 2015.

Although the budget proposes sweeping cuts, it does not fundamentally alter three large programs which have propelled the deficit to its current level. The 2012 proposal would not affect funding levels to Medicare, Medicaid or Social Security, all of which are growing in terms of proportion of the budget and share of national debt.

Sam Butterfield can be reached at [email protected]