Washington Extra – Cake cutting
Everyone SAYS they want to cut the budget deficit, but when it comes to actually agreeing on a course of action, it’s not exactly a piece of cake.
President Barack Obama says his budget plan would halve the deficit by 2013. “So what we’ve done here is make a down payment, but there’s going to be more work that needs to be done, and it’s going to require Democrats and Republicans coming together to make it happen,” he said.
But Democrats and Republicans are far from seeing eye-to-eye on how to go about deficit cutting.
House Republican Leader Eric Cantor explained the difference as he sees it: “For years, Democrats have proposed more government spending to create jobs, resulting in the largest debt and deficits in history while unemployment remains too high. Republicans believe in free markets and the ability for small businesses and entrepreneurs to keep more of their own money so they can invest, grow their companies and hire employees.”
At some point both parties are going to have to start singing “stuck in the middle with you,” or nothing’s going to move.
(Sorry, have Grammy’s on the brain – how many people in DC have heard of Arcade Fire?)
Here are our top stories from Washington today…
Obama budget attacks U.S. deficit, fight looming
President Obama proposed halving the deficit by 2013 and cutting $1.1 trillion over the next decade in a budget he called a “downpayment” on fiscal control. But Republicans, who accuse Obama of being a tax-and-spend Democrat, said the president had not gone far enough in controlling costs. They aim to make the 2012 presidential election a referendum on his fiscal track record. Obama said his plan was a balance between deficit reduction pain and investment for growth. It only provided a general guide on how to tackle entitlement outlays that include the Social Security and Medicare programs responsible for huge government spending.
For more of this story by Alister Bull and Jeff Mason, read here.
For a Q&A on how the budget proposal works, click here.
Facts and fiction gloss up U.S. presidents’ budgets
Every president does it — plays with the numbers in their annual budgets to make them add up to meet policy goals and to put a nicer gloss on a bad situation. President Obama plans to reduce a budget deficit that is projected to account for 11 percent of the entire U.S. economy this year to just 3 percent in 2015. Meeting that goal “would be a significant achievement,” said David Kendall, an analyst with Third Way, a centrist think tank. Much of the deficit reduction is done through economic assumptions that are brighter than private forecasts, analysts said.
For more of this story by Donna Smith, read here.
Obama seeks corporate tax break cuts for revenue
President Obama revived earlier proposals to raise tens of billions of dollars by cutting tax breaks enjoyed by America’s biggest companies, ideas that have floundered in Congress for several years. Obama’s 2012 budget request proposes to raise $129 billion over 10 years by limiting deferral of taxes on income earned abroad and curtailing what the White House calls abuse of foreign tax credits, among other provisions. Last year’s budget proposal was similar, seeking to raise about $122 billion by trimming loopholes.
For more of this story by Kim Dixon, read here.
CFTC, SEC see funding surge under Obama plan
The White House proposed large funding increases for market regulators, a move already coming under fire from Republicans who oppose key provisions in the Dodd-Frank financial reform law. The administration’s fiscal 2012 budget proposes giving the SEC a 28 percent funding increase to $1.427 billion compared to fiscal year 2010 actual spending levels. The CFTC would see an 82 percent spending jump to $308 million, but $117 million of that total would be offset through a user fee on financial firms that is unlikely to draw support in Congress.
For more of this story by Christopher Doering and Sarah N. Lynch, read here.
Pentagon would get brief boost under Obama budget
President Obama is seeking $671 billion for the military next year, offering the Pentagon a short-term boost for its core operations even as it prepares for tighter budgets in coming years. The administration’s fiscal 2012 budget proposal includes $118 billion for wars, chiefly in Afghanistan and Iraq, on top of a record Pentagon base budget of $553 billion. The base budget request is $22 billion above the level enacted for 2010, a new high even as the government faces an overall freeze in federal spending.
For more of this story by Andrea Shalal-Esa and Jim Wolf, read here.
Obama keeps Afghan war spending, Iraq costs down
President Barack Obama on Monday proposed spending almost $110 billion on Afghanistan, signaling little let-up in the U.S. war drive despite demands for tougher spending controls at home. Obama, in his budget for the 2012 fiscal year, proposed spending just $16 billion in Iraq — a significant decrease as U.S. diplomats take over from combat troops under a security agreement between the two countries.
For more of this story by Andrew Quinn, read here.
Obama budget has $556 bln, 6-year transport plan
President Obama proposed an ambitious long-term transport spending plan in his 2012 budget as a way to boost economic competitiveness and spur job growth. While cutting other spending, Obama aggressively accelerated efforts to upgrade aging roads, bridges and introduce high-speed rail with a six-year, $556 billion package. The total is 60 percent richer than the last transportation blueprint enacted by Congress, which expired in 2009.
For more of this story by John Crawley and Lisa Lambert, read here.
Fannie, Freddie to need almost $90 bln more-WHouse
The White House expects to shovel close to $90 billion to Fannie Mae and Freddie Mac over the next few years, though they are expected to start paying back more than they receive as of next year. The two firms have already taken more than $150 billion in direct taxpayer aid. The Obama administration expects that cumulative total to reach $236 billion by fiscal year 2021.
For more of this story by Corbett B. Daly, read here.
Obama budget targets brand name medicines
Big pharmaceutical companies could face increased competition from generic drugmakers under two proposals put forth by the Obama administration despite earlier savings extracted from drugmakers as part of last year’s healthcare law. President Obama, as part of his 2012 budget proposal, called for cutting the number of years drugmakers could exclusively market brandname biologic drugs to 7 years from 12.
For more of this story by Susan Heavey, read here.
Obama would end subsidies to wealthiest US farmers
President Obama called in his 2012 budget plan for the elimination of farm subsidies to the wealthiest growers, arguing that the payments distort the farm sector and some farmers can be paid even if no crops are grown. Lawmakers rejected an identical proposal a year ago, ahead of the 2010 mid-term elections. They said any change in farm supports should be delayed until a scheduled overhaul in 2012.
For more of this story by Charles Abbott, read here.
Obama 2012 budget provides $8 bln for clean energy
President Obama proposed boosting funds for clean energy research and deployment in his 2012 budget by slashing subsidies for fossil fuels such as oil, gas and coal. The budget provides the Department of Energy $29.5 billion for fiscal year 2012, up 4.2 percent from the proposed 2011 budget, and up 12 percent from the enacted 2010 budget. Some $8 billion would support research in clean energy like wind, solar and advanced batteries.
For more of this story by Timothy Gardner, read here.
In food vs fuel debate, U.S. resolute on ethanol
As world food prices reach new highs, a handful of politicians and hard-hit corporations are readying a fresh effort to forestall the use of more corn and soybeans as motor fuel. They are likely doing so in vain, say experts. Unlike in 2008, when a wave of global panic over grain supplies provoked a fierce “food vs fuel” debate, there’s so far only muted outcry over biofuels, even after corn surged last week to within 10 percent of its 2008 peak following a forecast showing even higher use in the ethanol sector.
For more of this analysis by Timothy Gardner and Charles Abbott, read here.
For a related graphic, click here.
US bailout cop Barofsky resigns as TARP winds down
The top government auditor for bailouts of financial firms and automakers resigned his position as the $700 billion TARP winds down. Neil Barofsky said in a resignation letter that he will leave on March 30, but did not state a specific reason for his decision to resign his position as TARP Special Inspector General after serving just over two years. He wrote that it “has truly been an honor to serve, particularly during such a critical time.”
For more of this story by David Lawder, read here.
U.S. halts use of long-life landmines, officials say
The U.S. military has stopped using a type of land mine often condemned as a long-term threat to civilians and has ordered its stock of 1.3 million of the mines be set aside for destruction, officials say. The decision to move ahead with a long-standing policy to end the use of persistent landmines — those that cannot be set to self-destruct or deactivate — by the end of 2010 comes as the Obama administration continues to study whether to join a global treaty banning anti-personnel mines.
For more of this story by David Alexander, read here.
What we are blogging…
Budget and bipartisanship don’t mix on Valentine’s Day
Where’s the love? Despite all the (whining?) and dining at the White House in the hopes of bipartisanship and civility, Republicans got out the trash-talk for President Obama’s 2012 budget proposal. Obama released a $3.7 trillion proposal as the first salvo in the annual budget wars. Republicans immediately marched out their disapproval.
For Tabassum Zakaria’s full post, click here.
CPAC victory in hand, Ron Paul takes on Tea Party
Libertarian Ron Paul, a godfather of the Tea Party movement, isn’t altogether happy with his political progeny these days. Fresh from victory in last week’s CPAC presidential straw poll, the Republican congressman from Texas laments to MSNBC’s “Morning Joe” that some Tea Partiers aren’t measuring up when it comes to the tough defense and entitlement program cuts he believes are needed to save the United States from economic cataclysm.
For David Morgan’s full post, click here.
McDonalds serves up McWeddings in Hong Kong
In the buzzing financial hub known for its fast living, young Hong Kong couples can now grab love on the run at the city’s McDonald’s outlets, which are offering a burgeoning new sideline: “McWeddings.”
For more of this story, read here.
Photo credit: Reuters/Michaela Rehle (gingerbread dough for traditional Oktberfest hearts)