Wednesday, February 16, 2011

Major Budget Battle Looms With Massive Differences

Feb 15: President Obama held a press conference and discussed the Fiscal Year 2012 budget (ending September 30, 2012) which he released on February 14 [See WIMS 2/14/11] and other major issues. The President explained how his budget addresses the Administrations plans to reduce funding and yet maintain priority programs and the policy direction for the country. Following the President's address Republican leaders commented on the briefing. The results indicate that their are massive differences in funding levels, priority programs and policy direction between Republicans and Democrats and no clear path for resolution. One immediate deadline is the March 4 end of the Fiscal Year 2011 (ending September 30, 2011) Continuing Resolution (CR) that has provided a short-term extension of last year's funding levels through March 4. The House is currently considering its  H.R. 1 FY 11 funding bill and considering some 400 amendments. Senate action and approval will be necessary, possible reapprovals by the House and Senate if changes are made and then to the President for his signature. It remains to be seen if an approvable bill can make it to the President's desk with such major issue differences between the parties.
    At the press conference, President Obama said, "When I took office, I pledged to cut the deficit in half by the end of my first term.  Our budget meets that pledge and puts us on a path to pay for what we spend by the middle of the decade. As a start, it freezes domestic discretionary spending over the next five years, which would cut the deficit by more than $400 billion over the next decade, and bring annual domestic spending to its lowest share of the economy since Dwight Eisenhower. . .

    "Still, even as we cut waste and inefficiency, this budget freeze will also require us to make some tough choices.  It will mean freezing the salaries of hardworking federal employees for the next two years.  It will mean cutting things I care about deeply, like community action programs for low-income communities.  And we have some conservation programs that are going to be scaled back.  These are all programs that I wouldn't be cutting if we were in a better fiscal situation.  But we're not. We also know that cutting annual domestic spending alone won't be enough to meet our long-term fiscal challenges.  That's what the bipartisan fiscal commission concluded; that's what I've concluded.  And that's why I'm eager to tackle excessive spending wherever we find it -– in domestic spending, but also in defense spending, health care spending, and spending that is embedded in the tax code. . . All of these steps are going to be difficult. And that's why all of them will require Democrats, independents, and Republicans to work together. . .

    "So I believe we can find this common ground, but we're going to have to work.  And we owe the American people a government that lives within its means while still investing in our future  -- in areas like education, innovation, and infrastructure that will help us attract new jobs and businesses to our shores.  That's the principle that should drive this debate in the coming months.  I believe that's how America will win the future in the coming years." The President went on to answer tough questions regarding the budget and the long-term deficit including Social Security, Medicare and Medicaid, accumulated debt and defense spending.

    House Speaker John Boehner (R-OH), Majority Leader Eric Cantor (R-VA), Majority Whip Kevin McCarthy (R-CA), Conference Chairman Jeb Hensarling (R-TX), and Budget Committee Chairman Paul Ryan (R-WI) issued the following statement after President Obama's press conference and said:

    "The American people are ready to get serious about tackling our fiscal challenges, but President Obama's budget fails to lead. The President's budget punts on entitlement reform and actually makes matters worse by spending too much, taxing too much, and borrowing too much -- stifling job growth today and threatening our economic future.  

    "The President says that he wants to win the future, but we can't win the future by repeating the mistakes of the past or putting off our responsibilities in the present. Our budget will lead where the President has failed, and it will include real entitlement reforms so that we can have a conversation with the American people about the challenges we face and the need to chart a new path to prosperity. Our reforms will focus both on saving these programs for current and future generations of Americans and on getting our debt under control and our economy growing. By taking critical steps forward now, we can fulfill the mission of health and retirement security for all Americans without making changes for those in or near retirement. We hope the President and Democratic leaders in Congress will demonstrate leadership and join us in working toward responsible solutions to confront the fiscal and economic challenges before us."
    U.S. Senate Republican Leader Mitch McConnell (R-KY) delivered following remarks on the Senate floor today (February 16) regarding a freeze in government spending. He said, "As the debate over government spending comes into focus this week, I think it's worth noting once again how this debate has shifted in recent weeks. After two years of bailouts and Stimulus bills, we're finally talking about how much government should cut instead of how much it should spend. Obviously, the details matter. And we'll be working those out in the weeks ahead. But the fact that this debate has shifted is a testament to the millions of Americans who insisted that their voices be heard on this issue. They've made a difference. It's important we acknowledge that.

    "Now the question shifts to whether those in power will actually follow through in any serious way. Will Democrat leaders in Washington really do something to rein in a government we can no longer afford, or will they just pretend to, and hope the American people focus on their words instead of their actions. Unfortunately, the early signs are discouraging. The President's response to the growing national alarm about spending and debt was a proposal to freeze government spending at the already-irresponsible levels that he himself has set over the past two years — levels that, if maintained, will only intensify the current crisis by putting us deeper and deeper in debt. The consensus on the President's proposal is that it's both unserious and irresponsible, and that, despite what the President may say, he's not in fact treating this crisis with the seriousness it demands. . ."

    Access the full text of the President's press conference including questions and responses (click here). Access a video of the President's press conference (click here). Access the statement from House Republican leaders (click here). Access the complete statement and video from Senator McConnell (click here).

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