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Obama seeks more money for education, setting up showdown with Congress

Obama's budget plan would cut spending by $2.50 for every $1 in extra taxes it seeks.

The new budget that President Barack Obama is sending to Congress aims to achieve $4 trillion in deficit reduction over the next decade by restraining government spending and raising taxes on the wealthy. To help a weak economy, however, Obama’s proposal requests modest increases in funding for education and transportation.

While administration officials on Feb. 12 defended the plan as a balanced approach, Republicans belittled the effort as a repeat of failed policies that does too little to attack soaring costs in programs such as Medicare and threatens growth by raising taxes. The debate is almost certain to go all the way to Election Day in November, with gridlock keeping Congress from resolving the spending debate until a lame-duck session at year’s end.

Obama’s budget plan, which he unveiled Feb. 13, would funnel new spending to areas he highlighted in his State of the Union speech.

Research and development for advanced manufacturing would see a 19-percent increase, to $2.2 billion. The budget seeks $30 billion to modernize at least 35,000 schools and $30 billion to help states hire teachers and police and firefighters—programs that Obama first proposed in his American Jobs Act last year. That bill died in Congress.

The president called for the creation of a $5 billion program that will challenge school districts and states to better train and recruit the teachers. His budget also seeks $300 million in new funding to improve child care and school preparation.

In addition, Obama wants community colleges and businesses to work together to train 2 million workers in high-growth industries, and he has requested $8 billion to create a new fund to encourage this effort.

For details about Obama’s $70 billion request for education funding, click here.

Obama’s plan, which he spelled out at Northern Virginia Community College in Annandale, Va., is called the “Community College to Career Fund.” It would seek to train workers within areas such as health care, transportation, and advanced manufacturing, and the program would be administered by the Education and Labor departments.

For the president, the budget is another opportunity to try to position himself as a defender of the middle class, a leader willing to ask the wealthiest to pay more taxes and to use government spending to spur job growth. It gives a nod to the president’s call for “balanced” deficit reduction, while also aiming to preserve Democrats’ brand as guardians of the social safety net.

After a year in which the conversation was about “How much do we cut?” Obama’s budget will continue to try to shift to more politically advantageous questions: “Who should pay more?” and “What is fair?”

“In the long term, we need to get the deficit under control in a way that builds the economy that can last for the future,” White House Chief of Staff Jacob Lew said Feb. 12 on ABC’s “This Week.” Obama wants to do that “in a way that’s consistent with American values so that everyone pays a fair share.”

Republicans are set to offer a competing vision guided by a call for smaller government, lower taxes, and an overhaul of entitlement programs.

Obama’s spending blueprint for the budget year that begins Oct. 1 projects a deficit for this year of $1.33 trillion. That would mean four straight years of trillion-dollar-plus deficits.

The budget projects a decline in the deficit to $901 billion in 2013, and continued improvements are expected to shrink the deficit to $575 billion in 2018.

Republicans said Obama’s plan was a stark reminder that the Democratic president had failed to meet the pledge he made after taking office in 2009 to cut the deficit in half by the end of his first term.

But Lew said the administration had to contend with a deep recession and soaring unemployment that had driven the deficits higher than anyone anticipated. He said Obama’s plan would cut the deficit below 3 percent by 2018, to levels that economists generally view as sustainable. He added that faster deficit cuts now would set back an economy still struggling with high unemployment.

For details about Obama’s $70 billion request for education funding, click here.

“I think there is pretty broad agreement that the time for austerity is not today,” Lew said during a series of appearances on Sunday talk shows. “Right now we have an economy that’s taking root. … Austerity measures right now would take the economy in the wrong way.”

House Republicans are preparing their version of Obama’s budget that will propose sharper reductions in government entitlement programs such as Medicare, while avoiding any tax increases.

“We’re taking responsibility for the drivers of our debt,” said the chairman of the House Budget Committee, Rep. Paul Ryan, R-Wis.

Senate Republican leader Mitch McConnell of Kentucky said Senate Democrats did not want to vote on Obama’s spending plan, so he would once again put it forward for a Senate vote—where he predicted it would fail as it did last year.

Lew blamed House Republicans for pushing extreme measures rather than trying to reach consensus with Democrats and avoid the kinds of last-minute crises that roiled financial markets in 2011, such as the summer showdown over raising the government’s borrowing limit.

“Congress didn’t do a great job last year. It drove right to the edge of the cliff on occasion after occasion,” Lew said. “A lot of that was because of the extreme conservative approach taken by House Republicans.”

According to a White House fact sheet, Obama’s budget will adhere closely to the approach he outlined in September in a submission to the congressional “supercommittee” that failed to agree on at least $1.2 trillion in additional spending cuts to keep across-the-board cuts from taking effect next January.

The Obama budget sticks to the caps on annual appropriations approved in August that will save $1 trillion over the next decade. It also puts forward $1.5 trillion in new taxes, primarily by allowing the Bush-era tax cuts expire at the end of this year for families making $250,000 or more per year.

Obama, as he has in the past, also proposed eliminating tax deductions the wealthy receive and would put in place a rule named for billionaire Warren Buffett that would seek to make sure that households making more than $1 million annually pay at least 30 percent of their income in taxes.

Obama also would impose a new $61 billion tax over 10 years on big banks aimed at recovering the costs of the financial bailout and providing money to help homeowners facing foreclosure on their homes. His plan would raise $41 billion over 10 years by eliminating tax breaks for oil, gas, and coal companies and claims significant savings from ending the wars in Iraq and Afghanistan.

Lew said the budget would cut spending by $2.50 for every $1 in extra taxes it seeks.

Material from Tribune Co. was used in this report. Copyright © 2012, Tribune Co. Visit Tribune Co. online at Distributed by MCT Information Services.

For details about Obama’s $70 billion request for education funding, click here.

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