The massive budget blueprint that President Obama released Thursday puts his stamp on the entire operation of the federal government - fulfilling campaign promises of redistributing the tax burden and stripping Bush-era policies that the Democrat dubbed irresponsible, while amassing more than $3 trillion in debt over the next two years.
From making permanent a tax cut for workers to ending tax cuts for the better-off, the president signaled his vision for government in a document outlining massive new spending - $3.6 trillion in 2010 alone. The proposal would make a down payment on universal health care and tackle his No. 1 priority of curbing the effects of climate change.
It greatly adds to the national debt, projecting deficits of $1.8 trillion in 2009 and $1.2 trillion in 2010.
It also outlines $2 trillion in “savings,” coming mostly by ending President George W. Bush’s tax cuts for individuals making $200,000 or more and families earning $250,000 per year or more and creating a cap-and-trade system to tax greenhouse gas emissions.
The White House says much of that $1.8 trillion deficit for 2009 reflects Mr. Bush’s plans for a budget year that began in October and the stimulus plan needed to boost the dormant economy. The administration presented its own blueprint - the full, detailed budget will come in April - as the start of a “new era of responsibility,” giving that title to the 134-page document.
The budget introduction asserted that Mr. Obama inherited a “legacy of irresponsibility, and it is our duty to change it.”
Reactions to the budget fell along mostly party lines, with Sen. Edward M. Kennedy, Massachusetts Democrat, saying it sent a strong statement on health care and “restored the American dream” for workers, while Republicans bashed Mr. Obama for a tax increase that they said would hurt the small businesses that create most jobs in the United States.
Sen. John Kerry said the budget “reflects an honest change in Washington that begins to reckon with our biggest challenges,” adding: “This is nothing short of a sober, honest assessment of where our country stands and a tough, realistic plan to get our budget in line with our priorities.”
But Sen. Olympia J. Snowe of Maine, one of just three Republicans who voted for the president’s stimulus, lamented that the budget falls “woefully short” on fiscal responsibility and deficit reduction.
She said the president was wrong to increase non-defense discretionary spending by more than 9 percent after the stimulus.
“Although bold with its intention, this blueprint is scarce on details,” Mrs. Snowe said.
Rep. Jeff Flake, Arizona Republican, called it an unsustainable level of spending, though he added praise for Mr. Obama’s proposal to cut payments to farms with incomes higher than $500,000.
Much of the spending in the budget outline was an expansion of what the administration already has done with its $787 billion economic stimulus plan, building on the transportation, education and infrastructure funding that the president signed into law last week. It details tax credits for college students, job training, public health plans and teenage pregnancy programs that interest groups said had been underfunded for years.
Under Mr. Bush, “prudent investments in education, clean energy, health care and infrastructure were sacrificed for huge tax cuts for the wealthy and well connected,” budget staffers wrote in an introduction that White House press secretary Robert Gibbs referred to as “passionate.”
One of the largest elements of the budget is $634 billion over 10 years to create a health care system reserve fund that officials said was a “first crucial step” to universal care.
It lives up to campaign and other promises - offering $6 billion in cancer research to reach the goal of doubling the funding, adding $1 billion for the Food and Drug Administration’s food-safety efforts related to inspection and contamination and setting $1 billion to help low-income children by making school meals more nutritious.
The proposal doubles Head Start funding for poor children and includes money for “promise neighborhoods” that would increase after-school activities and college counseling in high-poverty areas and adds $7.4 billion more than the previous budget for the Department of Housing and Urban Development, spending that homeless advocates hailed as a significant leap.
It puts 50,000 more police officers on the street and creates a “Choice Neighborhoods Initiative” for high-poverty areas to “challenge public, private and nonprofit interventions that would have the largest return on federal investments.”
Mr. Obama fulfills a campaign promise to increase the size of the military by asking for $20.4 billion more than the 2009 budget, and he gives troops a 2.9 percent pay raise. The Defense Department’s proposed budget is a 4 percent increase over 2009.
He also keeps a campaign promise to add $25 billion to the Veterans Affairs Department budget over the next five years.
While raising taxes on the wealthy, the budget proposes making permanent the tax credit for workers signed into law with the president’s $787 billion economic stimulus plan last week. Under that cut, the average worker will see about $65 per month more starting April 1.
Several elements of the budget expand on the stimulus plan - proposing $1 billion more per year on high-speed rail projects, $1.3 billion for broadband expansion and adding to education credits.
The budget “lays the groundwork” for automatic enrollment in 401(k) employee savings plans and expands funding for national service - increasing AmeriCorps from 75,000 positions to 250,000.
The administration aims for a large boost in environmentalist activities, increasing Environmental Protection Agency funding by 34 percent, granting more than $1 billion for states and tribes to institute environmental programs, and adding $3.9 billion to fund safe drinking water. It boosts parks funding by $100 million and adds $130 million to study impacts of climate change on lands, fish and wildlife.
The budget increases National Science Foundation funding by 16 percent for research with an emphasis on climate change and includes $20 billion in loans for rural development and renewable energy within the department of agriculture.
It also dedicates more than $1.3 billion to acquire weather satellites and climate sensors as part of climate research and includes $11 billion for modernizing federal buildings.
Mr. Obama laid out the broad outlines of a cap-and-trade scheme to control greenhouse gas emissions. Beginning in 2012, the plan would auction off pollution credits that companies could trade with one another, making the biggest polluters pay the most to raise $665 billion over 10 years.
The president also called for U.S. foreign assistance to double to $50 billion as part of an effort to “help bring stability to other parts of the globe and greater security for our nation.”
From a diplomatic perspective, it starts funding for a “multiyear” effort to “significantly increase” the size of the Foreign Service at the State Department and U.S. Agency for International Development.
It’s the biggest spending blueprint in history, in part because of a change in strategy.
The president and his team hailed the budget because for the first time, it includes $130 billion funding for the wars in Iraq and Afghanistan, without “gimmicks” used by Mr. Bush. They also noted that it “recognizes the statistic likelihood of natural disasters” - it includes a $75 million reserve for forest fires, for example - and provides a 10-year outlook instead of a five-year projection.
But the budget blueprint also outlined as savings money that was unlikely to ever be spent in Iraq - projecting that $183 billion for the war in 2019 would be “saved” to cut the deficit, despite the fact that government policy is that troops would have been home from Iraq by that year for at least eight years.
An analysis by the conservative Heritage Foundation labeled it “budget trickery” because the military’s own plan is to bring troops home in 2011 and House Minority Leader John A. Boehner called the savings “at best, deceptive.”
Seeking to get ahead of the flood of red ink, Mr. Obama, in brief remarks to reporters, went beyond the document’s details to promise a few more cuts. He said he would find savings of $20 billion from the agriculture cuts; $200 million from stopping coal mine recovery payments to mines that have already been cleaned up; tens of millions of dollars by stopping an “ineffective” mentoring program; and $50 billion in stopping “overpayments and tax loopholes.”
“We will, each and every one of us, have to compromise on certain things we care about,” he said in promising more cuts.
As important as what Mr. Obama includes is what Bush administration items he removed. No longer does the budget include an item for personal Social Security accounts, which Mr. Bush put in his annual budgets long after that prospect had died on Capitol Hill.
Senate Majority Leader Harry Reid, Nevada Democrat, said the president also opted not to pursue storing nuclear waste at the proposed Yucca Mountain facility in Nevada - something Mr. Bush had sought but environmentalists and local politicians fought vehemently.
• Stephen Dinan contributed to this report.
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