Obama juggles budget priorities amid economic, political pitfalls
As President Obama grapples with a struggling economy and a gridlocked Congress, experts and politicians are weighing in on whether Obama can juggle debt reduction, an economic recovery and his own campaign priorities.
Obama has released a $3.82 trillion budget for 2011, with a projected deficit of more than $1.5 trillion.
President Obama said in a letter to Congress that his budget focuses on important policy goals while reducing the projected budgets over the next 10 years. He said more can be done to promote balanced budgets and that he supports a budget commission to investigate ways to save money.
“As we look back on the progress of the past 12 months and look forward to the work ahead, I have every confidence that we can—and will—rise to the challenge that our people and our history set for us,“ Obama wrote.
The budget has raised a variety of reactions and explanations by supporters and opponents.
Joseph Minarik, the senior vice president and director of research at the Committee for Economic Development, said that Obama inherited one of the most difficult economic situations of the 20th century, and that makes it difficult for Obama to balance the competing priorities of deficit reduction and Obama's agenda.
"It is a balancing act, it is a choreography and it is going to be extremely difficult to manage," Minarik said. "Its going to be very hard, resources are scarce, their budget is strapped and the deficit is growing."
John Irons, a researcher and policy director at the Economic Policy Institute, said in a press release that the budget still reflects Obama’s campaign promises, but also looks to restrain spending.
“This budget attempts to preserve some of the President’s core priorities—including increases in the departments of Education, Energy, Transportation, and the National Science Foundation—but it also restrains many spending areas,” Irons said.
The budget contains increased funding for educational and energy investment programs as well as Obama’s $100 billion jobs creation program, along with $23 billion in cuts and reductions in various government programs alongside a spending freeze on certain departments within the budget.
Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, said in a press release that Obama’s budget does a good job of reducing the deficit, but that he doesn’t do enough.
“This has to be the start – not the extent of – the President’s push to implement a strategy to dig us out of this fiscal hole,” she said.
House Speaker Nancy Pelosi said in a press release that Obama’s priorities and economic recovery are linked.
“Enshrined in this year’s budget is a renewed focus on the areas set to drive our economic recovery and form the foundation for long-term prosperity: affordable health care, clean energy, education, infrastructure, and innovation,” Pelosi said.
Senator Chuck Grassley, R-Iowa, said in a press release that Obama’s priority has to be about job creation and reviving the weak economy.
“The focus has got to be on jobs. Tax incentives that encourage job creation can help if they’re done right. The President’s proposed budget has some tax relief that’s generally agreed would encourage investment and hiring,” Grassley said.
Republican Senator Judd Gregg, R-N.H., said in a press release that Obama’s budget would finance itself “on the backs of our children,” and that American needed a budget that would address entitlement spending and restrain spending.
“Instead, the President has sent us more of the same – a budget that claims to be fiscally responsible, but just below the surface contains more spending, more borrowing and more taxes.” Gregg said.
Senator Kent Conrad, D-N.D., the Budget Committee chairman, said in a press release Obama does a good job of balancing government spending and the need to spur the economic recovery but that the focus should eventually be on debt reduction.
“In the near-term, we must emphasize policies that encourage job creation in the private sector, including tax credits for businesses that hire and other provisions to encourage businesses to add employees. For the long term, we must begin to pivot to focus on controlling our debt.”
What’s new in the budget for Obama’s Campaign Priorities?
Clean Energy:
A $36 billion increase in loan guarantees to build new nuclear power plants. The total amount of loan guarantees will total $54 billion.
About $7.3 billion in tax credits for clean or renewable energy manufacturing, with up to 30 percent in tax credit subsidies for each project. Increased from $2.3 billion last year.
Eliminating tax breaks and subsidies for oil, gas and other aspects of the fossil fuels industry for $36 billion in savings.
Education
$3 billion increase in funding for K-12 program that encourages clearer, higher standards for testing and achievement, and rewards positive results with grant and loan money.
$490 million to help grow charter schools.
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