Federal Budget 2012: What to watch for
(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?
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).
• 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.
• 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 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 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.
| February 11, 2011; 6:40 AM ET
Categories: Budget, Eye Opener
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