Obama releases FY 2012 budget as deficit rises to record-high $1.6 trillion

Matthew Boyle Investigative Reporter
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President Barack Obama on Monday released his budget recommendations for the fiscal year 2012, which his administration says will shrink the record-high $1.65 trillion budget in 2011 to $1.1 trillion in 2012. The administration says for 2013, the deficit will fall below $1 trillion for the first time since 2009.

Obama’s budget director Jacob Lew said the budget has “a lot of pain” and that “this is a tough budget,” during media appearances on Monday morning. Lew said the Obama administration made lots of “tough decisions” and “serious cuts” in order to get the budget to where it is.

“It’s a budget that takes $400 billion out of discretionary spending by freezing it over the next five years,” Lew said. “That means making the kinds of trade-offs where it’s no longer just cutting things that we would call waste or fraud or abuse, but it means taking programs that, in other circumstances, we would not cut and making reductions because, like every American family, we have to win within our means and invest in the future.”

The president calls for an 11 percent increase in education spending and a 12 percent increase in energy spending, and he recommends $538 billion in direct appropriations to the Pentagon, which is substantially more than the $516.2 billion House Republicans called for late last week. The president did call for $300 million in cuts to community development block grant programs, but that cut pales in comparison to the GOP’s recommended $3 billion slash. Obama also called for cutting $2.5 billion from a federal program that pays heating bills for low-income families.

House Budget Committee Chairman Paul Ryan, Wisconsin Republican, said Obama’s 2012 budget recommendations fall short of what’s needed to take on the financial problems facing the nation – and that the president should have listened more closely to the American people.

“Failing to heed the warnings of economists and the demands of the American people, the president’s budget accelerates our country down the path to bankruptcy,” Ryan said in a statement. “Far from ‘living within its means,’ the president’s budget puts the government on track to nearly double in size since the day he took office – a direct result of his party’s reckless spending spree. His budget destroys jobs by imposing a $1.6 trillion tax hike, adding $13 trillion to the national debt and fueling uncertainty in the private sector.”

The president’s budget proposal for 2012 won’t be discussed in Congress, which ultimately will pass its own budget, until after the new Continuing Resolution, or CR, goes through. The CR has kept the government running throughout the 2011 fiscal year and will likely do so through the end of it, on Sept. 30.

UPDATE 1:17 p.m.:

President Obama is seeking a $53 billion increase in transportation funding — which would pay for things like the railway project his administration has been touting as well as for new Transportation Security Administration full-body scanners. The president is also seeking $15.7 billion to provide high-speed wireless broadband internet access to 98 percent of Americans.