WASHINGTON: President Barack Obama is sending Congress a $3.73 trillion spending blueprint that pledges $1.1 trillion in deficit savings over the next decade through spending cuts and tax increases.
Obama's new budget projects that the deficit for the current year will surge to an all-time high of $1.65 trillion. That reflects a sizable tax-cut agreement reached with Republicans in December. For 2012, the administration sees the imbalance declining to $1.1 trillion, giving the country a record four straight years of $1 trillion-plus deficits.
Senior administration officials say Obama would achieve two-thirds of his projected savings through spending cuts that include a five-year freeze on many domestic programs. The other one-third of the savings would come from tax increases, including limits on tax deductions for high-income taxpayers.
Even before Obama's new budget for 2012 was unveiled on Monday, Republicans were complaining that it did not go far enough. They branded Obama's budget solutions as far too timid for a country facing an unprecedented flood of red ink that has pushed annual deficits to all-time highs above $1 trillion.
''We're broke,'' House Speaker John Boehner said Sunday on NBC's ''Meet the Press.'' He was defending a Republican effort not only to squeeze more savings out of Obama's 2012 budget but also to seek $61 billion in cuts for the current budget year.
House Republicans, many of whom were elected on an anti-deficit pledge, forced their own leaders to nearly double the savings they will seek in the seven months left in the 2011 budget year. Congress has been unable to pass a budget for the current year, and the government has been operating on a stopgap spending bill that expires on March 11.
Jacob Lew, the president's budget director, appearing on CNN's ''State of the Union,'' refused to say what size cuts for 2011 would be acceptable to the administration. He stressed a desire to find a compromise that would avoid a government shutdown, something that last occurred during a protracted budget battle between Congress and the Clinton administration.
Obama's new budget will put forward a plan to achieve $1.1 trillion in deficit reductions over the next decade, according to an administration official who spoke on condition of anonymity in advance of the formal release of the budget.
Two-thirds of those savings would come from spending reductions, including $400 billion in savings from a five-year freeze on spending in many domestic government agencies.
The other one-third of savings would come from tax increases. The biggest tax hike would come from a proposal to trim the deductions the wealthiest Americans can claim for charitable contributions, mortgage interest and state and local tax payments. The administration proposed this tax hike last year but it never advanced because of widespread congressional opposition.
In addition to cutting deficits, Obama's new budget would increase spending in selected areas such as education, infrastructure spending and research and development _ areas where the administration believes spending must be boosted for the country to remain competitive in the global economy.
Republicans have called these proposals nonstarters, saying the government can't afford spending increases and should only be debating how much to cut. They have also challenged Obama's five-year freeze on many domestic programs, saying that the president wants to freeze spending at 2010 levels, after two years of sizable spending gains. They are pushing to take spending back to 2008 levels, before spending ballooned in response to a deep recession.
''Americans don't want a spending freeze at unsustainable levels,'' said Senate Republican Leader Mitch McConnell. ''They want cuts, dramatic cuts.''
Boehner said that Obama's budget ''will continue to destroy jobs by spending too much, borrowing too much and taxing too much.''
Lew rejected criticism that the $1.1 trillion deficit-cutting goal fell far short of the $4 trillion in deficit cuts outlined by the president's own deficit commission in a plan unveiled last December. The commission urged an attack on the biggest causes of the deficits _ spending on the benefit programs Medicare, Medicaid and Social Security _ and defense spending.
Obama's budget avoided painful choices in those areas although it does call for $78 billion in reductions to Pentagon spending over the next decade by trimming what it views as unnecessary weapons programs such as the C-17 aircraft, the alternative engine for the Joint Strike Fighter aircraft and the Marine expeditionary vehicle.
Administration officials said that the savings from limiting tax deductions for high income taxpayers would be used to pay for keeping the Alternative Minimum Tax from hitting more middle-class families over the next two years.
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