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Posted at 6:40 AM ET, 02/11/2011

Federal Budget 2012: What to watch for

By Ed O'Keefe

Eye Opener

(With reporting by Nick Anderson, David Brown, Ashley Halsey III, Cecilia Kang, Lyndsey Layton and Mary Beth Sheridan)

Monday's anticipated release of President Obama's proposed 2012 budget launches in earnest a growing debate between the White House and Congress over government spending. The exchange should continue through the spring, as lawmakers first attempt to settle funding levels for fiscal 2011 before shifting to the next fiscal year.

Obama's touchstone phrase since the State of the Union address has been "win the future," a slogan meant to define a spending plan focused on economic development and job creation that also scales back spending in other areas to pay down the federal deficit. Throughout this week the White House released choice details of his budget proposals in an attempt to emphasize that focus on fiscal responsibility and targeted spending.

The president plans to call for a five-year freeze on discretionary spending not related to national security, a move that would reduce the deficit by more than $400 billion, Office of Management and Budget Director Jacob J. Lew said this week.

Obama is also slated to propose a two-year plan to continue paying unemployment benefits for cash-strapped states as the economic downturn continues, the White House said this week. Thirty state governments are already borrowing about $42 billion in federal funds, and the White House anticipates the proposal will appeal to Republicans because it involves a tax moratorium for those hard-hit states.

Obama also announced Thursday that he wants to use $18 billion in federal funds to connect 98 percent of the nation to the Internet on smartphones and tablet computers in five years.

He hopes to raise about $27.8 billion by auctioning off airwaves now in the hands of television stations and government agencies. Some of the money would be used to fund new rural 4G wireless networks and a mobile communications systems. But the remaining funds -- about $10 billion -- would go toward lowering the federal deficit over the next decade.The Congressional Budget Office anticipates the deficit will climb to $1.5 trillion this year.

Finally, the administration said this week that it wants to invest $53 billion in high-speed and intercity rail service in the next six years, expanding on a signature spending initiative that congressional Republicans have promised to slash. The White House considers a vast high-speed-rail network a vital part of keeping the United States competitive with other economic powerhouses that already use the technology.

With all that spending and borrowing, aides said this week, Obama also wants to cut several billion dollars from the government's energy assistance fund for the poor -- a hardy perennial in budget proposals. The proposal will pit the White House against lawmakers from Northeastern states who don't appreciate talk of cutting heating assistance during an historically cold winter. The administration appears to welcome the fight as a way to convince Americans that it is serious about spending cuts.

Expect Obama's budget to include a slightly smaller request for education funding than a year ago, though still a bit higher than the level Congress has actually appropriated so far for fiscal 2011. Obama talked at length during the State of the Union about college affordability and innovation in the classroom, meaning we should see requests to fund Pell Grants for needy college students and for funding K-12 school reform programs, including the Education Department's Race to the Top initiative.

Obama is expected to propose the Food and Drug Administration receive $100 million in additional funding for food safety. Initial estimates by the Congressional Budget Office suggested, however, that the agency needs about $300 million in the next year in order to implement the requirements of a sweeping new food safety law. Reforms are expected to cost $1.5 billion over five years.

The budget could also bring disappointment for some of the government's medical researchers, according to sources who were not authorized to speak on the record. The National Institutes of Health has seen very modest budget increases in recent years. But if the budget continues to be essentially flat-lined--or is rolled back to 2008 spending levels, as some House members want--then recent increases, undertaken to reflect the importance of biomedical research as a public good and potential contributor to the economy, will be further undone.

On foreign matters, officials believe budget requests for the State Department and the U.S. Agency for International Development will be fairly similar to the 2010 budget request of about $56 billion. Secretary of State Hillary Rodham Clinton is aware of the tight fiscal situation, and has cut certain programs, according to aides.

Republicans have targeted both agencies for cost-cutting. Rep. Ileana Ros-Lehtinen (R-Fla.), the new chairwoman of the House Foreign Affairs Committee, pledged on taking the position this year to "work to restore fiscal discipline to foreign affairs."

There likely will be an increase in the budget request for the "frontline states" of Iraq, Pakistan and Afghanistan, according to sources. In particular, the State Department is assuming control of numerous programs in Iraq that had previously been carried out by the U.S. military. Overall, officials say, U.S. taxpayers will save billions of dollars because of the U.S. military's departure, but some costs are being shifted onto the State budget.

The State Department recently concluded a two-year exercise known as the Quadrennial Diplomacy and Development Review, which was aimed at focusing on the department's core missions and making it more efficient. The timing of its release wasn't coincidental, according to officials speaking on condition of anonymity since the budget has not been released.

No matter what the Obama administration proposes, remember -- it's just a proposal. Republicans generally won't agree with the spending plan and will want deeper cuts, with some of them wanting deeper cuts than others. (Witness the emerging feud between GOP House leaders and conservative members who want to slash $100 billion in fiscal 2011 spending.)

Certain lawmakers may also fight to restore programs Obama is attempting to eliminate. NASA funding proposals in recent years provoked sharp disagreements between the White House and a bipartisan group of space-state lawmakers. And lawmakers from suburban Maryland and Northern Virginia, who represent hundreds of thousands of federal workers, likely will fight to ensure that Obama's planned two-year pay freeze doesn't last much longer.

Now, we want to know -- what do you think Obama's budget proposals should include? Where would you spend more money and how would you address the ballooning federal deficit? Perhaps most importantly, if you're someone in the know -- what budget details can you share with us?

Leave your thoughts in the comments section below, e-mail them to us, or, if you're on Twitter, use #2012budget and your thoughts will appear in the box below:

Check back Monday for more coverage and analysis and click here for more coverage of Federal Budget 2012

Current and Former Officials News: Faulty comment by CIA Director Leon Panetta feeds the Egyptian confusion. In the shadows with White House counterterrorism czar John Brennan. Kevin Warsh to leave the Federal Reserve Board. Unable to question him before, Republicans tear into top Medicare official. Ronald Reagan honored with a new Forever Stamp. The fierce urgency of David Plouffe. U.N. Ambassador Susan Rice kicks off a pro-U.N. campaign. Lights! Camera! Austan (Goolsbee).

CIA:
Ex-CIA staffer alleges agency coverup of toxin exposure: He says the agency is unjustifiably invoking a "state secrets" claim to cover up evidence that he and his family suffered illnesses as a result of exposure to environmental contamination at an agency facility.

DEFENSE DEPARTMENT:
Contractors will bear brunt of personnel cuts at command: Army Gen. Ray Odierno said 2,000 of the nearly 3,000 positions slated for elimination at Joint Forces Command will be contractor positions.

U.S. FOREST SERVICE:
National forests plan would expand local discretion over wildlife management: The Obama administration wants to give directors of national forests more discretion over managing endangered wildlife, reversing decades-old rules that left the sensitive decisions to officials in Washington.

IRS:
IRS says breast pumps tax deductible expense: The ruling means that women will be able to use money set aside in pretax spending accounts to buy the pumps and related equipment.

TSA:
TSA boss says he'd fire security officers who strike: Under questioning, John Pistole said workers would be risking their jobs if they try to strike or fail to show up for work.

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By Ed O'Keefe  | February 11, 2011; 6:40 AM ET
Categories:  Budget, Eye Opener  
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Comments

"The president plans to call for a five-year freeze on discretionary spending not related to national security, a move that would reduce the deficit by more than $400 billion, Office of Management and Budget Director Jacob J. Lew said this week."

National Security! That's the scam to be in on! How much would they reduce the budget if they included the untouchable National Security?

Posted by: glenmayne | February 11, 2011 10:19 AM | Report abuse

glenmayne, so it's treason, then.

Posted by: getjiggly1 | February 11, 2011 12:52 PM | Report abuse

Don't know what to watch for but seriously expect grid lock. Maybe some blood in the water.

I figure our government ceased functioning on January 5, 2011. The Boehner/McConnell mod have done everything they can for the last four years to obstruct government operations but a few things got done.

Its the court system that needs attention now. Since Jesse Helms showed up back before light was invented there has been a backlog of court nominations that has finally brought our court system to its knees. And that is exactly how the republican hooligans prefer it.

A society without a functioning government, functioning rules, functioning regulations everyone lives by is a society in anarchy. Reagan's dream world, where the biggest bully rules.

Posted by: PoliticalPrisoner2012 | February 11, 2011 4:17 PM | Report abuse

Barak we are BROKE and your days of trillion deficits are finally over. You can play to win all you want but not unless its paid for and the budget reduce to 2008 levels

Posted by: mandinka2 | February 11, 2011 8:59 PM | Report abuse

THE COMMANDER,viewpoints,obama "If you must break the law, do it to seize power: in all other cases observe it."OBAMA,Will screw us hard, fast, and in an elegant manner." obama The conqueror is always a lover of peace; he would prefer to take over our country unopposed.Truth be damned, Obama and THE WEAK-KNEED REPUBLICANS AND DEMOCRAT,Wake up america!! OBAMA goes about the business by speaking the lie.“If you tell a big enough lie and tell it frequently enough, it will be believed”Mmslim Barack Hussein Obama people have no idea of the extent to which they have to be gulled in order to be led." OBAMA will use every tool available: school teachers, politicians, news broadcasters, artists, musicians, scientists and doctors, lawyers and businessmen and men who claim to be preachers of the gospel of Jesus Christ. All will be pressed into the service of OBAMA to deceive men. "All propaganda must be so popular and on such an intellectual level, that even the most stupid of those towards whom it is directed will understand it. Therefore, the intellectual level of the propaganda must be lower the larger the number of people who are to be influenced by it." truth be damned. Obama It would be easier for the Devil to go to church and cross himself with holy water than for these people to comprehend the ideas which are accepted facts to us today.How fortunate for governments that the people they administer don't think. .Is Barack Obama pushing forward dangerous policies that are bringing the United States closer to a socialist dictatorship. Are you even aware?

Posted by: mjski56 | February 12, 2011 2:39 AM | Report abuse

Hey Khalif. Just because you knifed Mubarak in the back and forced his overthrow, doesn't mean you "get it" and you may continually forget the results of the November 2010 election. As you remember, you and your fellow left winged minions had your head and other parts handed to you. We don't like you, your left winged agenda and most of you spending binges.

Posted by: nomobarry | February 12, 2011 1:02 PM | Report abuse

How can any one take obama seriously when he wants to cut heating help for the needy and then spend $56 billion (at least) on a high speed train that will only benefit his supporters in the N E . He is a serious con man no doubt. He is willing to let the poor freeze in the winter and then give his supporters billions. I pray he is voted out before he totally destroys this country

Posted by: vageorge | February 12, 2011 5:56 PM | Report abuse

Obama, the man of the peeps! Thats why he gave the banks five trillion dollars of OUR money in the last two years. Look for QE3 this summer. Thats "quantitative easing." If you don't know what it is, you might as well go ahead and just starve now, instead of waiting for later.

Posted by: shred11 | February 12, 2011 10:53 PM | Report abuse

Mandinka, the deficit has little-to-nothing to do with Obama. The deficit was cast in stone before he took office. He signed a conservative stimulus bill and then has signed several tax cuts. People seem to agree that the economy is still very weak but much better than if McCain had been elected. Obama has been better for the stock market than any president in the past 80 or 90 years.
If we are serious about restoring jobs, we need much larger deficits. If we are serious about reducing the deficit, we need significant tax increases, significant cuts to current recipients of medicare and social security, and the admission that balancing the budget right now will guarantee a decades' long depression. These are tough choices, but nothing that the GOP has ever suggested will do anything about "jobs."

Posted by: CesarSozei | February 13, 2011 7:10 AM | Report abuse

How the $!#\@%* does the dufus expect to CUT spending by spending $Billions on trains, free internet, and all the other!#@$# he's planning in new spending?

Either cut spending or resign!!!

Posted by: iluv9mm | February 13, 2011 7:50 AM | Report abuse

Naturally, Obama's proposals is just so much Bull***. Nothing for the average American living in tioday's ROTTEN ECONOMY. What is his immediate plan for SS cost of living increase this year and what is he advising Medicare to cut!!!Today we are living, we seniors. Five years from now means beans to us.

Posted by: LOONYBIN2000 | February 13, 2011 8:04 AM | Report abuse

Either this man is living in LaLa Land or he wants and is aiming to get kicked out on his A**.

Lets freeze him and his family out just as he is planning to do to needy Americans. HHEIL OPBAMA!!!!!!!!!!!

Posted by: LOONYBIN2000 | February 13, 2011 8:11 AM | Report abuse

ENOUGH! All we hear about is government spending. Well spending on social programs is NOT what has gotten us into this mess and curtailing them is not going to get us out! Open your eyes people, they are not taking away your taxes, they are just no longer spending them on you. Now, you'll be toiling to pay for a military state. I don't expect liars not to lie, but I do blame the dolts who believe them!

Posted by: sgreco1970 | February 13, 2011 8:23 AM | Report abuse

Suggested budget cuts:
Director of National Intelligence: If he thinks the Muslim Brotherhood is "secular", he's clearly out of the loop, at least unnecessary, and probably harmful.

Department of Education: Results have gotten worse since its creation. May not be the cause, but clearly not the solution.

Ethanol subsidies: does not result in a net reduction in use of fossil fuels and does increase the cost of food; last I heard, uses up 40% of the US corn crop.

RIF about half of the generals and other flag grade officers in the military. More actual work would get done.

Eliminate all positions in the government that have "Czar" in the title.

Posted by: danny70000 | February 13, 2011 8:25 AM | Report abuse

When you don't know what you are doing, you would think you would surround yourself with people who do. Apparently not!! All talk and no action!!

Posted by: CayC | February 13, 2011 8:35 AM | Report abuse

Government is there to do the "big" things we can't... my list: less, cheaper military, world war is a thing of the past... less medicare - better monitoring of the money, fewer government paid procedures... more on energy independence... less support for those on the government dole - it needs to be painful to live on the tax payer money... more incentive to get OFF tax payer assisted living - don't punish folks for small jobs... simpler health care for all, but taxpayers don't cover the expensive procedures... more on education assistance... less social security...

Posted by: QuantumSlice | February 13, 2011 8:37 AM | Report abuse

Reform government retirement. Let them retire after 20 years but do not pay benefits until they reach retirement age, maybe use Social Security standards. Government salaries are too much. We must stop the abuse of over paying police, teachers(particulaly professors). Professors work only a few hours in class room each week and are grossly overpaid. They claim it takes a lot of hours to prepare which is an outright lie. Actualy all government workers abuse their expense accounts. Post office is another area needing reform. They have about twice as many employees as needed. Legislators receive too much in benefits and expenses. They abuse their travel expense for personal vacation and pleasure. Some have personal jet aircraft provided for their travel and this is grossly unacceptable. I could go on and on but space is not available.

Posted by: emnusa | February 13, 2011 8:48 AM | Report abuse

Isn't it a little odd that our deficit is $1.5 trillion (that's trillion with a "T") and yet we're debating cutting only one hundred billion?

This is like discovering a raging fire in the living room and asking your spouse as you run out the door whether or not he or she turned off the oven.

Posted by: SequimBob2 | February 13, 2011 9:01 AM | Report abuse

Oh for pete's sake, if I hear one more person whine and cry about Obama bailing out the banks I'll scream. No, lets not bail out the banks. lets let them fall and then every account holder loses their entire savings. And don't ask for the FDIC to bail YOU out then, because they won't -and after all, you hate the idea of government spending anyway. Grow up people, we're in a serious crisis and all the backbiting and political junk wangling in the world won't help the situation. You either learn to work together and fix the problem or you can argue with each other until the country falls apart. I'm astonished at the lengths the political right are willing to go to just to score points for elections. Before long yo'll be getting elected to positions in a country that no longer exists. Fools.

Posted by: sgreco1970 | February 13, 2011 9:20 AM | Report abuse

Why aren't the big cuts coming from NASA,Aid to foreign countries, ending the wars, closing military bases in other countries. I would think their would be some considerable savings here?? You think!!!

Posted by: arewedoneyet1 | February 13, 2011 9:23 AM | Report abuse

sounds nice - it's all just window dressing.

face it - we can't afford war - $20 TRILLION over the last decade for 'intelligence', national security and armed conflict is just a bit too much - don't you think?

bring the troops home so we can stop making enemies we need not have and begin to reverse the decade long escalation of 'defense' spending.

it's the one and only way to make a dent in the budget.

accept the facts

- it costs more to kill one person than to feed 1000.

- feeding people induces gratitude.

- killing people induces revenge.

peace alone will bring the spending cuts required to satify the need for fiscal and moral responsibility.

time to start thinking differently because we are ALREADY BROKE!

Posted by: boblesch | February 13, 2011 9:30 AM | Report abuse

There goes Obama, again, saying one thing and trying to do the opposite, as this leak article shows. My disappointment and impatience with his backpedaling, reneging, and contradicting grows ever more as days go by towards 2012 - when I will either not vote for him or, even, against him. Now, that would truly be a change that America would believe in!

Posted by: TalkingHead1 | February 13, 2011 10:24 AM | Report abuse

As a Federal worker, who is flying ON MY OWN TIME TODAY FOR A BUSINESS TRIP, why is my pay frozen so that Isreal still gets 3 billion in aid from us???? what do I get out of that? NOTHING......THats WHAT. Same for all the other places we send money to...

Posted by: nowhine | February 13, 2011 11:19 AM | Report abuse

As a retiree living on a fixed income I am doing my part for deficit reduction.

SS - no COLA
Mil retirement - FWT raised by $32.00/mo

Now let cutback on all of the welfare programs, foreign aid, military spending and stupid Fed grants.

Posted by: g30rg3544 | February 13, 2011 11:39 AM | Report abuse

I don't like taking the heat from the poor but I also know that the Republican plan puts practically everyone (except rich folks) out in the cold. President Obama's cuts to reduce spending can be summed up in an article. Check out the ever long list of cuts that the Republicans are proposing that closely relates to all of us.

Posted by: Princey | February 13, 2011 1:15 PM | Report abuse

What to look for when Obama releases his budget? Look for the big smirk on his face.

Posted by: fregameeate | February 13, 2011 7:17 PM | Report abuse

We could, of course, cut a lot of things like the virtually useless CIA (that contracts out over 50% of its work), defense spending on unneeded weapons, education (and let the states deal with it), contract employees in all the departments (including State, the Pentagon and military) and earmarks (most of which are associated with unneeded programs).

Most of this spending is waste anyway. In fact, there's so much waste that $1.5 trillion could easily be cut without anyone feeling it except the contractors who have been on the government gravy train for far too long.

But all this Republican talk of cutting spending is just bull anyway. They'd be happy to settle for tax cuts for corporations and the rich and Obama will be happy to oblige with another one of his "deals."

And the deficit, just like the housing bubble, will get bigger and bigger with no end in sight. You don't believe me? Just ask Obama or any member of Congress what's the maximum deficit or debt that the America can sustain.

So, like all bubbles, when they break members of Congress will be pointing the fingers at everyone except themselves saying, "We weren't warned....we had absolutely no idea of the scope of the problem."

Posted by: billeisen1 | February 14, 2011 2:12 AM | Report abuse

nowhine, if you can't spell the country that you are whining about, you aren't fit to whine in the first place. Please tender your resignation immediately, or just off yourself and save HR the trouble.

Posted by: getjiggly1 | February 14, 2011 1:58 PM | Report abuse

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