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Posted at 3:06 PM ET, 02/14/2011

Federal Budget 2012: Initial observations

By Ed O'Keefe

President Obama's proposed 2012 budget request is out, and most of official Washington is poring over the details as a big fight on spending is set to begin.

Here's a roundup of where things stand as of Monday afternoon:

Taxes: As my colleague Lori Montgomery notes (and if you don't follow Lori's reporting on the budget, then you're out of the loop), Obama's proposals "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." It would also end subsidies for oil and gas companies, impose new taxes on hedge fund managers and establish a $30 billion fee for financial institutions aimed at repaying taxpayers for the federal TARP bailout. You think those ideas will fly with Republicans and big business? Um, not really.

Some agencies gain, some lose: Big winners include the departments of Education, Energy and Veterans Affairs, while the EPA, Interior and Agriculture would suffer. For more details from the Post reporters who cover the big agencies, click here.

The size of the federal workforce might grow: Based on the budget projections, the federal government would add about 15,000 employees in fiscal 2012, compared with the estimate for fiscal 2011. The growth is related to new activities in certain agencies, said Office of Management and Budget Director Jacob J. Lew, citing new hires at the Treasury Department, the SEC and the Commodity Futures Trading Commission. "If you look agency by agency, you'll see that it's not a story of broad-based growth. It's in the most cases pretty concentrated," Lew said.

Fiscal commission? What fiscal commission?: It's like it never happened, according to colleague Ezra Klein.

Entitlement and tax reform are also missing: The budget contains no specific plans for fixing the nation's tax code or entitlement programs. The White House believes that's a separate conversation for another time.

Worker pay and benefits: Pay remains flat for civilian federal workers, but the military gets a modest bump. Read more here.

The reorganization: The budget proposal says very little about how a reorganization might be carried out and how it might affect agencies, confirming the fears of longtime government observers that Obama isn't serious about a significant revamping of government operations.

The Postal Service: As the Federal Eye has predicted, a debate on the future of the U.S. Postal Service could emerge as a sleeper issue. Without diving too deeply into the details (we'll do that later), the White House submitted a proposal that would help the Postal Service pay down its debt by refunding money it overpaid to the government's worker retirement funds. The refund would occur over 30 years however, and the proposal isn't enough to stop the financial hemorrhaging. Still, it starts the conversation.

We'll add more as the day progresses. Meanwhile, review the budget for yourself and share your thoughts in the comments section below.

By Ed O'Keefe  | February 14, 2011; 3:06 PM ET
Categories:  Budget  
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Next: Federal Budget 2012: Where does money go? (Video)


Federal employees receive higher salaries in comparison to those in the private sector and their benefits are astounding. I am against any pay increases for at least five years to get their salaries comprehempable to those of us surfs.

Posted by: jlreynolds4 | February 14, 2011 3:53 PM | Report abuse

Private sector employees have more room for growth, and get rewarded for being an asset to the company. Government dead beats make more then corporate dead beats, but thats about it.

Posted by: SA-Town | February 14, 2011 4:37 PM | Report abuse

Ironic that there is no direct focus on the 800lb gorilla in the room- i.e. the US politicians wasting of approx. $1.4 TRILLION a year on these senseless wars and destruction and maiming and killing....end these unethical wars based on lies and military industrialists buying politicians and close down nearly ALL foreign bases and bring our troops home then cut half the dod, homeland security, veterans admin. and 145 other fed security forces IN HALF NOW....that would solve nearly half the deficit!

Then tackle ineffective policy such as drugs, taxes, education, commerce, justice and others…..change ineffective policy and close down respective agencies who have not even come close to meeting their goals such as dea, doe (energy), doa, irs, etc. etc.

Additionally, reduce federal pay by 10% for all grade 11 and above and abolish in step pay raises and enable agencies to fire non- doers and benefits and pension reform.

Time to change ineffective policy and reform government at every level ....and get back to making internationally competitive goods.....and I don't mean weapons!

Posted by: ticked | February 14, 2011 7:07 PM | Report abuse

ticked, war is ok now, a Democrat is president. Stop complaining.

Posted by: getjiggly1 | February 15, 2011 10:40 AM | Report abuse

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