February 11, 2011
President Obama will release a budget for fiscal year 2012 on Monday that seeks to balance his pledge to reduce the deficit while making investments to boost the economy.
The budget is an outline of the president's policy goals that the U.S. Congress can more or less use or discard. According to news stories, a few items to look for include:
- Spending Freeze -- The president has said the budget will include a five-year freeze on non-security discretionary spending as a down payment toward curbing the U.S. budget deficit, which the Congressional Budget Office estimates will hit $1.48 trillion in fiscal year 2011.
- Defense -- The administration plans to ask Congress for a core Pentagon budget of around $553 billion in fiscal 2012, up slightly from the previous year's request.
- Regulators' Funding -- Last year Obama asked for big increases to the budgets for two key regulators that need to boost staff and technology to police the vast over-the-counter derivatives market, worth $600 trillion globally; but, Congress put the brakes on budget increases for 2011. The agencies say they'll need an increase if they are to put their share of newly passed financial regulatory reforms into place.
- Medicare and Medicaid -- All eyes will be on whether Obama tackles entitlement spending by cutting the popular Medicare and Medicaid health insurance programs for the elderly, disabled and poor. Although many acknowledge that spiraling Medicare costs are driving up the deficit and undermine the program's financial stability, cutting a popular benefit for older Americans who are also a major voting bloc is politically risky.
- Farm Subsidies -- For the third year in a row, Obama may try to cut subsidy payments to the big farmers who dominate U.S. agriculture. He could propose a cap of $60,000 per farmer from the $5 billion guaranteed annually to grain, cotton and soybean growers. The limit now is $80,000. Cuts also could be proposed for land stewardship. Lawmakers say any cuts should be deferred until farm policy is overhauled in 2012.
Reprinted in part from Reuters