Budget Battle Brewing Again On Capitol Hill

By: KKTV/AP
By: KKTV/AP

President Obama's chief of staff rejects the idea of austerity as a priority, saying it could slow slow the economy's progress.

"I think there is pretty broad agreement that the time for austerity is not today," Jacob Lew said during a series of appearances on Sunday talk shows. "Right now we have an economy that's taking root ... austerity measures right now would take the economy in the wrong way."

It was a preemptive attack on measures Republicans are geared to take as Obama rolls out his 2013 budget proposal. The president unveiled the budget Monday morning.

The new budget that Obama is sending to Congress aims to achieve $4 trillion in deficit reduction over the next decade by restraining government spending and raising taxes on the wealthy. To help a weak economy, Obama's proposal Monday requests increases in transportation, education and other areas.

The administration calls the plan balanced, while the GOP said its a stark reminder that Obama didn't go far enough in reigning in government spending. The debate could play a defining role in the 2012 election.

Obama's spending blueprint for the budget year that begins Oct. 1 projects a deficit for this year of $1.33 trillion. That would mean four straight years of trillion-dollar-plus deficits.

The budget will project a decline in the deficit to $901 billion in 2013 and continued improvements shrinking the deficit to $575 billion in 2018.

Republicans pointed out Sunday that Obama proclaimed he'd cut the deficit by half by the end of his first term, and accused him of breaking his promise to the American people.

Lew countered that the president inherited an economy in disarray; Obama was forced to take measures to prevent the recession from becoming a full-blown depression, as well as address the needs of an increasingly unemployed population. Unemployment drove deficits higher than anyone anticipated, Lew said.

House Republicans are preparing their version of Obama's budget that will propose sharper reductions in government entitlement programs such as Medicare while avoiding any tax increases.

"We're taking responsibility for the drivers of our debt," said the chairman of the House Budget Committee, Rep. Paul Ryan, R-Wis. "So when the dust settles and people see actually what we're doing, how we're promoting bipartisan solutions."

According to a White House fact sheet, Obama's budget will adhere closely to the approach he outlined in September in a submission to the congressional "supercommittee" that failed to agree on at least $1.2 trillion in additional spending cuts to keep across-the-board cuts from taking effect next January.

The Obama budget sticks to the caps on annual appropriations approved in August that will save $1 trillion over the next decade. It also puts forward $1.5 trillion in new taxes, primarily by allowing the Bush-era tax cuts expire at the end of this year for families making $250,000 or more per year.

Obama, as he has in the past, also proposed eliminating tax deductions the wealthy receive and would also put in place a rule named for billionaire Warren Buffett that would seek to make sure that households making more than $1 million annually pay at least 30 percent of their income in taxes.

Obama would also impose a new $61 billion tax over 10 years on big banks aimed at recovering the costs of the financial bailout and providing money to help homeowners facing foreclosure on their homes. It would raise $41 billion over 10 years by eliminating tax breaks for oil, gas and coal companies and claims significant savings from ending the wars in Iraq and Afghanistan.

Lew said the budget would cut spending by $2.50 for every $1 in extra taxes it seeks.

"In the long run, we need to get the deficit under control in a way that builds the economy," Lew said. "We do it in a way that's consistent with American values so that everyone pays a fair share."


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Comments are posted from viewers like you and do not always reflect the views of this station.
  • by Bob on Feb 13, 2012 at 09:12 AM
    Quiz for Republicans
    If you're not part of the solution, what are you?
  • by Kevin Location: Colorado Springs on Feb 13, 2012 at 08:36 AM
    Obama's going to need to get a lot more serious if he's going to fix this country, let alone have any hopes of reelection. We need serious cuts, and we need them forty years ago. I've compiled a short list of just a few of them, intended as an example. http://www.kconnolly.net/Archives.aspx?MinArch=09/01/2011&MaxArch=12/3/2011
  • by Nath Location: Colo Spgs on Feb 13, 2012 at 07:13 AM
    Greece takes the headlines about possibly bringing down the world's economic house of cards. Greece's situation is nothing compared to the U.S. or even California's. Bennie Bernanke and Timmie Geithner have been "loaning" Europe's central banks trillions of dollars under the table through currency swaps which puts us at extreme risk if the Euro fails - and it eventually will. Unless significient cuts are made NOW, not false cuts as Obama proposes like $4 trillion over a ten year period while his "budgets" run $1.4 trillion deficits each year and new spending by Congress through attaching funding for new programs and agencies to the bills which bypasses a budget limit - if we had one. Eliminating several unconstitutional agencies and cutting the U.N. off would be a good start.
    • reply
      by Anonymous on Feb 13, 2012 at 09:03 AM in reply to Nath
      Greece is in fact worse. Nominally ours is bigger, but compared to GDP it's not. Japan has it twice as bad as us however, and if cuts aren't made we will be there too.
  • by hmm on Feb 13, 2012 at 06:15 AM
    This budget is pointless, Democrat Harry Reid head of the senate has said he has no intention of passing a budget this year. That will be four years of no budget and a national debt that has been increased far worse than all other presidents combined through out history. America can not take another 4 years of Obamas leadership as well as a Senate controlled by Harry Reid. This has been a do nothing Senate while the Republican congress has passed over 30 job bills that the senate will not even discuss or bring to a vote at the orders of Obama. This is starting to amount to treason and the day of the rope is coming very soon for treasonous scum.
    • reply
      by Anonymous on Feb 13, 2012 at 09:12 AM in reply to hmm
      The house hasn't done anything worthwhile either, they refuse to discuss bills from the senate all the same. Congress as a whole has been garbage for over a decade, hence the poor approval rating. Congress needs term limits because only the junior congressmen and senators carry the opinions of those they represent and not just taking sides of their party affiliation.
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