Obama Promises Budget To Reduce Deficit

President Obama unveils his $3 trillion budget blueprint Monday. He's presenting it while speaking at a Baltimore middle school, emphasizing that he wants to make room for spending on education and infrastructure.

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STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. I'm Steve Inskeep.

RENEE MONTAGNE, host:

And I'm Renee Montagne.

President Obama's budget plan is out this morning. The president unveiled the federal government's spending for next year, while speaking this morning at a middle school in Baltimore. He emphasized that he wants to make room for spending on education and infrastructure.

President BARACK OBAMA: These investments are an essential part of the budget my administration is sending to Congress.

INSKEEP: NPR White House correspondent Scott Horsley got a look, last night, at some of the details of the budget. Scott, good morning.

SCOTT HORSLEY: Good to be with you.

INSKEEP: Does the president follow up on his promise in the State of the Union speech to restrain spending?

HORSLEY: Well, he does, Steve. This budget scales back or eliminates some 200 federal programs, including some that are close to the president's heart: block grants for community organizers, heating assistance for low-income families. These are programs the White House says it would not be cutting in better times. At the same time, the budget preserves - or in some cases, expands - funding for the president's priorities: education, infrastructure, clean energy..

Of course, this is just the opening salvo in a spending debate with Republicans. Congress is still working on the spending plan for the current year, and the House Republicans are pushing for bigger cuts. One White House official says he's confident they can work with Republicans, based on their success with the tax cut deal in December. Of course, it's a lot easier to come to a compromise on cutting taxes than on cutting spending.

INSKEEP: Scott, can I just ask: When you do things like proposing cuts in heating assistance for low-income families, aren't you proposing cuts that you know that someone in Congress has a good chance of restoring? I mean, you can propose that cut safely because the spending is probably going to come back.

HORSLEY: A little bit like the school board volunteering to cut the funding for the football team.

INSKEEP: Oh, yes, yes. I wonder if that might be the situation. In any event, discretionary, non-defense spending, which is what the president is focusing on here, isn't that a fairly small piece of the budget?

HORSLEY: It is. And for example, defense is, if not spared the budget scalpel, is at least spared the budget ax in this plan. Under the president's budget defense spending would continue to grow at the rate of inflation, although there will be some savings from the troop drawdown in Iraq.

[POST-BROADCAST CORRECTION: Two Department of Defense programs targeted for elimination in the president's budget were mischaracterized. The C-17 is a cargo aircraft, and the alternate engine is for the F-35 Joint Strike Fighter.]

Also, the Pentagon is still pushing to eliminate some unwanted programs, like a C-17 tanker and an extra engine for the F-22. It's always tough, though, to cut those programs because defense contractors are very savvy about spreading the work out among a lot of congressional districts.

And long term, the big deficit drivers are entitlement programs: Social Security, Medicare. Those are not addressed in this budget. And neither is the calls for a big overhaul - the income-tax system.

INSKEEP: Why would the president not make those proposals?

HORSLEY: Well, you'll remember the president's fiscal commission had some very specific recommendations about cutting defense, cutting entitlement programs, and addressing taxes to deal with the deficit. When it comes to Social Security, the White House says it has some specific differences with what the fiscal commission recommended.

But more broadly, the president just does not want to put out a plan that would become a target. One senior administration official recalled that when Ronald Reagan proposed a fix for Social Security back in 1981, it was - in his words - a clay pigeon. And the White House quickly had to retreat on that plan. Then a couple of years later, the president and congressional Democrats were able to work out a fix for Social Security that preserved it for a generation.

The White House wants to see something like that happen here. They're just not taking the first step in this budget.

INSKEEP: Let's talk about what everybody else is saying about the White House. We've heard Speaker John Boehner describe this as job-destroying. That may sum up some of the Republican response. What about the president's fellow Democrats?

HORSLEY: Well, there's already been some hand-wringing over things like the cut in heating assistance for the poor. The White House says we know these are tough cuts, but they're telling lawmakers if you don't like these, where would you cut instead? Of course, as we said, the House Republicans would cut all over the place.

The first battle is going to be over this year's spending plan. There may also be a battle on the revenue side. The president has proposed to cap the tax deduction available to wealthy families. That's an idea he floated in his first budget a couple of years ago. It went nowhere.

HORSLEY: Scott, always a pleasure speaking with you.

HORSLEY: Good talking to you, Steve.

INSKEEP: That's NPR White House correspondent Scott Horsley.

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Correction Feb. 16, 2011

In this interview, Scott Horsley mischaracterized two Defense Department programs targeted for elimination in the president's budget. The C-17 is a cargo aircraft. The alternate engine is for the F-35 Joint Strike Fighter.

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