Obama touts $17 billion 'lot of money' budget cuts

WASHINGTON " President Barack Obama sent Congress a detailed budget Thursday boasting of cutting or killing 121 federal programs in a belt-tightening he likened to that of most Americans in difficult times. But the trims amounted to a tiny fraction of the new spending he wants, and some have already been nixed by allies on Capitol Hill.

Obama said his cuts would amount to $17 billion " in a budget totaling well over $3 trillion for the fiscal year that begins in October. He's estimating the government's red ink will still be about $1.2 trillion, down only slightly from this year's all-time record.

Republicans scoffed that Obama's cuts were not nearly enough. "They appear to be a diversionary tactic " an effort to change the subject away from the unprecedented debt this budget heaps on future generations," said House Republican Leader John Boehner of Ohio.

On the other hand, some of Obama's proposed trims are recycled from George W. Bush's hit list and won't be popular with some Democrats. For instance, he proposed ending a $400 million-a-year program that pays states and counties for keeping illegal immigrants in their jails " a Bush idea rejected previously by the Democratic-controlled Congress.

The president defended proposed cuts that he portrayed as a mix of some "more painful than others."

"In Washington, I guess that's considered trivial. Outside of Washington, that's still considered a lot of money," he said. "But these savings, large and small, add up."

If there was a theme to Obama's cuts and spending initiatives, it was to continue to provide generous increases to domestic programs that had been squeezed during the eight years of the Bush administration while reviving oft-rejected Bush-era proposals to cut programs that critics say have outlived their usefulness but still have important support on Capitol Hill.

"What we're trying to do is reorient government activity toward things that work," said White House Budget Director Peter Orszag.

Obama proposed:

" Ending $26 billion in oil and gas industry tax breaks, which he called "unjustifiable loopholes" in the tax system that other industries do not get.

" Slashing almost in half a benefits program for the families of slain police and safety officers from $110 million to $60 million.

" Eliminating federal support for a $35 million-a-year radio-based marine navigation system rendered obsolete by the satellite-based Global Positioning System.

" Doing away with a $142 million program to help states pay to clean up abandoned mines.

" Abolishing an Education Department attache's post in Paris, at a savings of $632,000 per year.

He called for a $3 increase in per-segment air fare taxes starting in 2012, which would raise the maximum fee from $5 to $11 per trip as a way to finance airport security screenings

In over 1,500 pages, Obama sought to flesh out the bare-bones budget outline he submitted in February shortly after taking office. Both the House and Senate last week approved a $3.4 trillion budget blueprint reflecting most of Obama's priorities and clearing the way for new spending on health care, energy and education. More details are due from the White House next week.

On the spending side, Obama's new details emphasized substantial increases for his domestic priorities.

He proposed:

" Plowing $2 billion more into merit-based teacher pay to help failing schools turn around. He would spend $370 million on a successor to the Reading First literacy program, a key element of Bush's No Child Left Behind law.

" Spending an additional $584 million for pandemic flu efforts, on top of the $1.5 billion in emergency money for 2009 that he asked Congress for in the wake of the swine flu outbreak.

" Increasing child nutrition programs by $1 billion, partly to pay for a 20 percent increase in the number of food inspectors.

" Setting up a $1 billion program to develop or rehabilitate housing for the poor.

Obama proposed more money for the Labor Department to hire about 1,000 new employees, including 670 new investigators and other staffers to enforce safety, health, minimum wage, overtime and other laws.

"We'll begin to restore worker protection programs after years of decline," said Labor Secretary Hilda Solis.

The relatively modest scope of Obama's proposed cuts " amounting to about one half of one percent of spending " led to a sometimes contentious briefing with White House press secretary Robert Gibbs.

"I've said this before, and I'll say it again: $17 billion is a lot of money to people in America. I understand that it might not be to some people in this town, but that's probably why we're sitting on a $12 trillion American Express bill," Gibbs said, referring to the $10.7 trillion national debt.

Jared Bernstein, Vice President Joe Biden's top economic aide, said in an interview that the value of the budget cuts goes beyond their monetary value. "We need to take that kind of close look, that kind of scrutiny, of all the government spending that we're doing," he said.

Fellow Democrats may well reject some of those revisions, including Obama's proposal to stop paying states and counties that keep illegal immigrants in their jails. He also proposed doing away with Even Start, a $66 million program to promote child literacy that the administration argues is not as effective as other early-childhood education programs like Head Start.

Bush had sought to end both programs " only to be rebuffed by the Democratic Congress.

Lawmakers from the potent California, New York and Florida delegations are sure to fight the proposed elimination of the State Criminal Alien Assistance Program, the one that helps states house illegal immigrants in jails.

"None of this will be easy," Obama said, facing cameras at the White House with Orszag standing behind him.

Stanley Collender, a former congressional budget expert, said that $17 billion in cuts was significant in these recessionary times when increased spending is deemed to be more justified than usual. Furthermore, Obama had used the cuts to offset some of his proposed spending increases.

That was a nod to fiscally conservative "Blue Dog" Democrats, said Collender, now with Qorvis Communications, a Washington consulting firm.

"Are the cuts enough to balance the budget? No, of course not. But that wasn't the point," he said.

Despite redoubling its efforts to portray itself as tough on waste and spending, the administration and Congress have taken the nation on a steady course of higher federal spending. In rapid succession has come passage of a $787 billion economic recovery bill, a $410 billion omnibus appropriations bill and Congress' $3.4 trillion budget for next year, which calls for increases of almost 10 percent over current funding for non-defense agency budgets.

Even as Obama spoke, a key House panel was adding about $12 billion to his war-spending request.

Many items in the budget are about more than money.

It affirms the administration's prohibition on so-called warrantless wiretapping " the Bush administration electronic surveillance program.

And it would provide $197 million to find an alternative to the Yucca Mountain nuclear waste project in Nevada, another setback to the nuclear power industry from the administration " but a welcome gesture to Senate Majority Leader Harry Reid, who has long sought to block the project 90 miles from Las Vegas.

Obama said that Americans are tightening their belts in difficult times and want to know if Washington "is prepared to act with the same sense of responsibility."

"I believe we can and must do exactly that," Obama said.

Obama is claiming savings from eliminating a host of accounts typically earmarked by members of Congress such as a $10 million West Virginia highway project obtained by Sen. Robert Byrd, D-W.Va., and $15 million obtained by Dianne Feinstein, D-Calif., for diesel emissions reduction grants.

In fact, some of the cuts, like terminating production of C-17 cargo aircraft and phasing out direct payments to farmers with sales exceeding $500,000 annually, have already been rejected by Obama's allies in Congress.

About half the budget savings would come from an effort by Defense Secretary Robert Gates to curb military programs, including ending production of the F-22 fighter and killing a much-maligned replacement helicopter fleet for the president that's way over budget.

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Associated Press Writers Sam Hananel, H. Josef Hebert, Libby Quaid, Erica Werner, Pamela Hess, Julie Pace and Pauline Jelinek contributed to this report.

On the Net:

Obama proposals: http://www.whitehouse.gov/omb/budget/fy2010/assets/trs.pdf