2012 Budget Blueprint: An OverviewFebruary 16, 2011
On Monday, President Barack Obama released his 2012 budget blueprint that includes various cuts, some increases, and steers clear entirely of Social Security and Medicare. The $3.73 trillion budget projects deficit reductions of $1.1 trillion over the next 10 years and includes a five-year, non-security spending freeze on domestic programs, as well as a freeze in pay raises for the federal civilian work force. Obama’s budget also relies on revenue increases such as a revamped corporate tax structure with limited deductions, and by limiting deductions taken by wealthier taxpayers.
For a more detailed analysis on the key budget proposals that stand to impact small business, please see the articles listed below.
As was to be expected, Republican leaders came out swinging against the plan as spending too much and not cutting enough. In response to their criticism of Obama’s budget failure to include proposals to reduce entitlement spending, House Republican leadership announced their plan to include reform proposals for Medicare, Medicaid and Social Security in their own budget proposal.
Another point of contention within the budget blueprint is the increase in federal workers. On the one hand, White House budget director Jacob Lew stated that many of the new hires would be for airport security, while on the other hand, Speaker John Boehner (R-Ohio) has stated that if federal employees have to lose their jobs, “so be it.”
In addition to continuing his call for greater investment in innovation, namely through an increase for biomedical research in the National Institute for Health, Obama’s budget proposes moderate increases to the Department of Education in the form of a new competition similar to “Race to the Top.” He also proposed enhanced infrastructure projects and a new National Infrastructure Bank to oversee those projects.
A few of the more controversial cuts proposed in Obama’s budget include: a 50 percent cut to the Low Income Home Energy Assistance Program (LIHEAP) program; a $1.3 billion cut to EPA funding; a $125 million cut to the Great Lakes Restoration Project; and elimination of 12 oil, gas and coal tax incentives which would raise $46 billion over 10 years.
Top administration officials have been testifying before Congress since Tuesday and are scheduled to continue appearing at hearings throughout the week.
Please click here to view the complete budget proposal.