President Obama’s upcoming budget blueprint is expected to include a mix of proposals with far-reaching consequences, including helping states with unemployment costs while cutting grants for cities and counties. The White House on Monday will detail its latest spending proposal, an opening salvo that is expected to start a highly partisan and protracted battle with congressional Republicans intent on slashing spending. “We’ve made some significant cuts, and the truth is, this will be an ongoing process and an ongoing discussion that will be had over the course of many months,” said White House press secretary Robert Gibbs. “We understand we have to make some serious changes in our fiscal policies going forward.”
So far, Obama has called for freezing federal workers’ pay and freezing discretionary, nondefense spending for the next five years. Obama on Wednesday is scheduled to have lunch at the White House with Republican House leaders to talk about the budget.
But lunch may not be enough to close a deal. Obama lunched last week with Senate Republican leader Mitch McConnell of Kentucky, who said Tuesday that “freezes aren’t going to cut it.”
The Congressional Budget Office this week estimated the federal deficit will hit $1.5 trillion this year. White House officials attributed the increase in part to a tax cut deal Obama brokered with Republicans in December.
“Predictions by the CBO should be a wakeup call to anyone who thinks they can hide behind a spending freeze,” McConnell said. “This is a dire warning that business as usual is a recipe for disaster.”
Ahead of the budget release, the administration has floated a few previews of what it contains, including deep cuts in community service block grants, a program that helps local anti-poverty efforts, and a more modest cut to community development block grants, which aid redevelopment.
The community service grant program would be cut in half, to $350 million, while the community development program faces a reduction of nearly 8 percent, or $300 million, according to Office of Management and Budget Director Jacob Lew.
“We know from mayors and county leaders how important these grants are for their communities, and are very aware of the financial difficulties many of them face, [but] the sacrifices needed to begin putting our fiscal house in order must be broadly shared,” Lew wrote in the New York Times.
The budget proposal also includes a short-term break for cash-strapped states struggling to meet their unemployment insurance obligations, and a reduction in funding for the Great Lakes Restoration Initiative, a major environmental cleanup program.
Still, the White House also is previewing a number of areas in the budget where Obama hopes to increase spending. In his recent State of the Union address, Obama noted the need to do more for education and to encourage business innovation in research and technology.
He also has promised to review the corporate tax structure with an eye toward reducing the current rates, and is expected to ask for an additional $8 billion to expand the nation’s high-speed rail service.
