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Obama on Budget: Tough Choices, More Work Ahead

President Barack Obama, with Office of Management and Budget Director Jacob Lew, speaks at Parkville Middle School and Center of Technology in Maryland, Feb. 14, 2011
President Barack Obama, with Office of Management and Budget Director Jacob Lew, speaks at Parkville Middle School and Center of Technology in Maryland, Feb. 14, 2011

President Obama says the 2012 fiscal-year budget sent to Congress contains tough choices involving spending on programs he cares deeply about. The president is calling for Democrats and Republicans to work together on additional steps to reduce excessive spending, but says programs vital to the nation's future must be preserved.

The budget comes in at $3.73 trillion, with $1.1 trillion in projected savings during the next decade from reductions in spending and tax increases, including $400 billion from a five-year domestic spending freeze.

Largely a result of the tax deal the president negotiated with Republicans last year, the 2011 deficit is projected to rise to a record $1.65 trillion.  That is the fourth straight year deficits will exceed $1 trillion, though the administration says this will come down by next year.

In remarks at the Parkville Middle School and Center for Technology in nearby Maryland, Mr. Obama said the budget finds savings by cutting wasteful programs, imposing greater accountability, and through reductions in areas he cares deeply about, such as energy assistance and other programs for low income Americans.

But while saying the nation needs to "walk the walk" when it comes to fiscal discipline, Mr. Obama underscored the need to invest in education and other areas he says are vital to the nation's future.

"While it is 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 cannot sacrifice our future in the process," he said.

The budget would cut or reduce about 200 government programs, reductions that Office of Management and Budget Director Jacob Lew said are made necessary by the state of the economy.

"Part of the cuts are in outdated programs, things that are duplicative, and things that we would choose to cut just because it is the right thing to do," he said.  "Part of the cuts are not going to be in that area, they are things that we wouldn't do, but for the fiscal challenges that we face."

However, the Obama budget  proposes increases for education, research and development, energy efficiency and transportation infrastructure, including a new high-speed rail proposal.

The president spoke again of his proposal to prepare 10,000 new math science teachers to improve education standards and increase U.S. competitiveness in the long run.   The budget also supports a goal of putting one million electric vehicles on the roads by 2015, and doubling electricity from clean energy sources by 2035.

White House officials say parts of the budget reflect work done by a bipartisan presidential fiscal commission.  However, the spending plan does not deal with the panel's major recommendations for drastic deficit-and debt-reduction measures, including cuts to so-called "entitlement" programs, such as Social Security and Medicare.

President Obama said it's clear that cutting annual domestic spending will be insufficient to meet long-term fiscal challenges, adding that bipartisan cooperation will be required in coming months.

"What we have done here is make a down payment," he said.  "But there is going to be more work that needs to be done and it is going to require Democrats and Republicans coming together to make it happen."

Among steps to bring down the deficit, Mr. Obama mentioned a proposed $78 billion reduction in Pentagon spending over five years, steps to end tax breaks for oil, gas and coal companies and savings from wasteful health-care spending.

Many of the investments Mr. Obama considers necessary for future U.S. job growth and competitiveness are viewed as wasteful spending by Republicans, who are proposing as much as $100 billion in reductions for the current fiscal year.

On Capitol Hill, the Republican Speaker of the House of Representatives, Ohio Congressman John Boehner, issued a statement saying the president's budget would "destroy jobs" and continue a "spending binge."

Wisconsin Republican Congressman Paul Ryan, who heads the House Committee on the Budget, said the president failed to deal with deficit and debt-reduction priorities.

"What did we just get today?  We got a punt," he said.  "The president punted on the budget, and he punted on the deficit and on the debt.  That's not leadership.  That's an abdication of leadership."

In April, Republicans plan to issue their own budget proposal, one Boehner said will "contrast sharply" with the spending plan the president sent to Congress on Monday.

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