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Posted at 6:00 AM ET, 02/14/2011

Federal Budget 2012: What to watch for, part 2

By Ed O'Keefe and Eric Yoder

Eye Opener

President Obama is set to travel today to Baltimore to unveil a $3.7 trillion budget proposal that would impact more than 200 federal programs next year and focus primarily on investments in education, transportation and research. But the proposal is already being panned by independent budget observers for mostly ignoring recommendations from the recent bipartisan fiscal commission.

Also expect to hear today from Office of Management and Budget Director Jacob J. Lew, who plans to brief reporters at 12:15 p.m. Other Cabinet secretaries and other top officials will also speak later in the day about their budget details.

We began our coverage on Friday and continue today by reviewing some other issues you should watch for within the requests:

1.) Pay and benefits: Federal employees typically care most about what the budget request says about pay raises, but since Obama already ordered a two-year pay freeze, watch for what it says -- if anything -- about the future of the freeze. Does the administration recommend extending up to five years, or argue it needs to end in order to competitively recruit new hires? Also, will Obama recommend a pay raise for troops? Service members are set for a 1.4 percent pay increase (if Congress ever passes a fiscal 2011 spending measure) -- paltry yes, but more than civilian workers will enjoy. If the administration keeps to a commonly used formula, troops would earn at least a 1.6 percent pay jump. That may set up another debate about federal pay parity.

2.) TRICARE: For those of you not in the know, that's the name of the health-care plan used by members of the military. The program's future could emerge as an emotional sideshow in this year's budget battles, pitting cost-conscious lawmakers against those who do anything and everything to defend troops and veterans. Certain costs for TRICARE enrollees haven't increased since the 1990s, but civilian federal workers endure premium increases every year. Defense Secretary Robert M. Gates has warned he may target the benefits for working-age veterans (roughly mid-30s to 60 years old) while keeping prices flat for active-duty troops. If Gates succeeds, career service members in the midst of a second career who still use TRICARE could have to pay more money for health-care for the first ever.

3.) That domestic spending freeze: Obama wants a five-year spending freeze on non-security programs, cuts that aides claim would reduce federal spending as a percentage of GDP to the lowest levels since the Eisenhower administration. Watch to see what budget request says about how the freeze should be handled. For example, it may recommend that agencies will be free to move money and personnel around within agencies and possibly even between agencies so long as they hit the overall savings targets. Similarly, the budget may say more about reducing contract spending -- an endeavor the administration has worked on for the last two years.

4.) Government reorganization: Obama says his ambitious reorganization plan will begin by reviewing the 12 agencies dealing with foreign trade. Will the budget have any more to say about those plans?

5.) This is just a proposal: And it's the latest in a series of budget plans put forth in recent weeks by the bipartisan fiscal commission and congressional Democrats. Others are sure to follow. And with the current fiscal 2011 continuing resolution set to expire March 4, the proposal may get drowned out as Washington first debates how to spend money in the remaining seven months of the current fiscal year.

We could go on, but the budget release is only hours away. What will it say about federal benefits and entitlements? What contract spending and the perilous state of the Postal Service's finances? Which agencies and departments stand to suffer or gain? Check back throughout the day for more coverage and analysis and bookmark our special report page on the 2012 federal budget.

What do you want to see in Obama's budget request? Share your thoughts in the comments section below or on Twitter by including #2012budget in your response.

Leave your thoughts in the comments section below

Cabinet and Staff News: It's been five years since Clarence Thomas spoke in Court. John Roberts and Samuel Alito are no sure bet against the health-care reform law.

AGRICULTURE DEPARTMENT:
For groups that sell goods abroad, help from U.S. taxpayers: A cotton council, for example, received $20.3 million in matching funds last year under a USDA program to promote and advertise products abroad.

CENSUS BUREAU:
Valentine's by the numbers: The government's premier statistical agency issued a holiday e-card.

DEFENSE DEPARTMENT:
For some troops, powerful drug cocktails have deadly results:
After a decade of treating thousands of wounded troops, the military's medical system is awash in prescription drugs -- and the results have sometimes been deadly.

Defense officials warn of crisis unless Congress approves 2011 funding bill: For weeks, officials have said that unless lawmakers pass the Obama administration's 2011 budget request, they will be unable to start new weapons programs and may have to limit training, maintenance and even personnel pay and other activities.

ENERGY DEPARTMENT:
Administration to push for small 'modular' reactors: The department is hoping for $500 million over five years, half of the estimated cost to complete two designs and secure the Nuclear Regulatory Commission's approval.

Students' solar-energy showcase is kicked off Mall: The administration evicted 1,500 students who design and showcase energy-efficient homes as part of the U.S. Department of Energy Solar Decathlon from the event's grand stage, the Mall.

Energy to reinvest savings from freezing contractor salaries: It is looking into how to reinvest the savings, angering workers who believed the money would be used to pay down the federal budget deficit.

FBI:
FBI file on Ted Stevens has color but little news: The release of his agency documents was expected to shed greater light on the circumstances surrounding his indictment and trial. But there is little new mention of the case.

FDA:
FDA approves first 3-D mammography device: The device "could significantly enhance existing diagnosis and treatment approaches" to breast cancer.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT:
Community development funding poses dilemma for Republicans: The $4.4-billion program -- which has long had bipartisan support because it shows constituents they're getting something back for the money they send to Washington -- stands as an example of the tough choices ahead for congressional Republicans.

NASA:
House continuing resolution would bar NASA from China ties: The language is the latest salvo in a battle between the White House and congressional conservatives over the future of the U.S. space program.

NASA spacecraft due for rendezvous with comet Tempel 1: It will approach the comet on Valentine's Day, taking pictures of devastation left by the Deep Impact mission of 2005.

DEPARTMENT OF VETERANS AFFAIRS:
Caregivers of wounded troops still waiting for benefits signed into law by Obama: Determining who qualifies for the new benefits - including whether veterans of pre-Sept. 11, 2001, wars should be eligible for all of them - has been a complicated, politically fraught process.

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By Ed O'Keefe and Eric Yoder  | February 14, 2011; 6:00 AM ET
Categories:  Budget, Eye Opener  
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Next: Federal Budget 2012: Reaction to Obama's proposal

Comments


I get so many sample stuff for free its awesome. Actually it is not difficult to find them just search online for "123 Get Samples" It is the best way!

Posted by: juliepotter123 | February 14, 2011 6:50 AM | Report abuse

If anyone is ABLE to retire, this would be the time to go ahead and do so, as things are certainly NOT going to get better any time soon for the Federal Employee.

Posted by: pattollie | February 14, 2011 8:34 AM | Report abuse

Krugman today in the IHT cites that the fed. payroll represents 5% of the federal budget. Cutting 5%, 10% or whatever is being proposed from this 5% is only penalizing one small group, and certainly won't get us close to reducing the fed. debt or balancing the budget.
Ending subsidies to oil & gas companies, ending the mortgage interest deduction for second or third homes, ending tax breaks for companies that ship jobs overseas, and the list of corporate welfare can go on. Why not put a .001% tax on each stock trade - this would get us where we want to be.

Posted by: rcmo | February 14, 2011 9:47 AM | Report abuse

RCMO,

There are 6 Government contractors to each USG direct hire employee. Focusing on direct hires for pay freezes while letting the other 85% of your indirect employees get raises isn't the best way to freeze spending. Future contracts need to have clauses where contractor pay is tied in to some multiple of the GS schedule. So if public employees go without a raise the guy sitting next to them who does the exact same work as them but get paid more for it should not get a raise either.

Posted by: Skippy21 | February 14, 2011 10:22 AM | Report abuse

What is immoral is to pay people for 99 weeks not to work! Give them a shovel and let them work for their money like any real American. As you all know Obama has thousands of shovel ready jobs just waiting! Time to fix our roads,bridges and parks! I think a few people instead of picking up a shovel might even magically suddenly find a job! The rest of the people spending 8 hours a day working with shovel in hand will sleep well at night knowing they are a productive part of America! As always you can contact me at work http://www.michigan-businessreview.com and yes keep those jokes coming! Yes that does include all Dems I mean only a joke could continue to let Obama **** in their face and tell them its rain!

Posted by: Loxinabox | February 14, 2011 11:01 AM | Report abuse

Skippy21
I agree - if there are 6 govt. contractors for every fed. employee and their pay too isn't frozen, it makes the fed. pay freeze even more pointless. Something many may not know is that just about every fed. employee hired since circa 1985 costs less - meaning their pension is essentially a 401K - their future pension depends how much they have chosen to contribute and how wisely - much like the same people condemning fed. employees, not the guaranteed annuity pre-1985 hires get - which maxes out @ 84% of their 3 highest salaried years.
What is wrong is all the proposals be put forward by our chicken pols. penalize future generations with higher taxes, lower pensions, longer work lives etc., when one major component of the current problem is that current retirees and those near retirement have been given far too generous benefits/pensions - not their fault granted - it was the actuarials, but why should the most wealthy generation/s ever be immune from shouldering some of the responsibility?

Posted by: rcmo | February 14, 2011 11:54 AM | Report abuse

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