President Obama Unveils Budget Proposal
President Obama says painful choices must be made to put America’s fiscal house in order. "I’ve called for a freeze on annual domestic spending over the next five years. This freeze would cut the deficit by more than $400 billion over the next decade, bringing this kind of spending - domestic discretionary spending - to its lowest share of our economy since Dwight Eisenhower was president [in the 1950s]," he said.
At the same time, the proposed budget expands funding for infrastructure projects, clean energy initiatives and educational priorities. Speaking at a primary school in Baltimore, Maryland, Mr. Obama said America must continue to invest with an eye to the future. "I’m convinced that if we out-build and out-innovate and out-educate, as well as out-hustle the rest of the world, the jobs and industries of our time will take root here in the United States. Our people will prosper and our country will succeed," he said.
Republicans promptly blasted the president’s budget blueprint, saying it would add more than $7 trillion to the national debt and push America to financial ruin. Republican Representative Paul Ryan of Wisconsin is chairman of the House Budget Committee. "It is not too late to right our ship, get our economy growing, get our debt headed in the right direction, and get America’s fiscal problems solved. But if we keep postponing this, if we keep punting [refusing to tackle the problem] like this budget does, then there will come a moment when it is too late," he said.
The Senate’s top Republican, Mitch McConnell of Kentucky, was even more blunt. "We’re broke [out of money]. We’re broke. We don’t have the money," he said.
Republican legislators have yet to craft an alternative 2012 budget of their own, but are intent on slashing current federal spending, and promise to keep cutting until fiscal woes are solved.
Congressman Ryamn said, "The debt crisis is caused by spending, not taxes. And so, let’s go where the problem is, and that is spending."
President Obama maintains that deep spending cuts favored by Republicans would harm America’s future economic prospects, and unfairly force the poor and vulnerable to bear the cost of years of fiscal excess. Republicans counter that a bloated federal government and ever-expanding national debt will destroy the country, harming everyone - rich and poor alike.
Budget analyst Bill Frenzel of the Brookings Institution says compromise is possible, if Mr. Obama and congressional Democrats are willing to consider deeper spending cuts, and Republicans agree to some form of increased taxation. "As long as Republicans like to cut expenses and Democrats are not as anxious to do so and would rather have a tax component, I think everyone will get less than they want from this budget," he said.
Economists say neither side in the budget debate has yet to embrace badly-needed reforms to programs that provide income and health care assistance to retirees, the costs of which are expected to sky-rocket in coming years. They argue, until those costs are contained, America’s fiscal and economic health will continue to suffer.
The first congressional budget votes could come as early as next week, but a final deal - if one can be struck - is likely months away.