Tip Toes

US BudgetRecap:Obama Tip-Toes Out of Startng Blcks W/FY12 Plan.

–Obama’s FY12 Budget Proposes $1.1 Trillion In Ten Year Savings
–Obama Says ‘Further Steps’ To Reduce Budget Deficit Are Needed
–House Budget Chief Ryan Calls Admin Plan A ‘Duck’ From Hard Choices
–Senate Budget Chief Conrad Says Admin Plan Is Okay For One Year

WASHINGTON (MNI) – President Obama released this week his fiscal
year 2012 budget which calls for $1.1 trillion in ten year savings with
about two thirds coming from spending savings and one-third from revenue
increases.

Obama’s FY12 budget sees budget deficits of $1.65 trillion in the
current year, FY11, and $1.1 trillion in FY 12.

According to the administration’s plan, cumulative deficits between
FY12 and FY16 will be $3.769 trillion and cumulative deficits over th
FY12-21 period will be $7.205 trillion.

The president’s plan to secure $1.1 trillion in savings relies
heavily on his proposal to freeze large portions of the discretionary
budget for five years. That secures $400 billion in savings.

Under the president’s plan for FY12, spending will reach $3.7
trillion while revenues generate $2.627 trillion.

Senate Budget Committee Chairman Kent Conrad said the president’s
plan “gets it about right for the first year,” but then falls short.

“We need a much more robust package of deficit and debt reduction
over the medium-and long term,” Conrad said in a statement. He repeated
his pleas for a “bipartisan” process to tackle longer-term deficits.

House Budget Committee Chairman Paul Ryan was far more dismissive,
blasting the plan as little more than a tactical placeholder designed to
force Republicans to take the heat for offering a more aggressive fiscal
plan.

In a sharp exchange with White House Budget Jack Lew at a hearing
on Obama’s FY12 budget, Ryan said the president’s new budget “does
nothing” to reform increasingly costly entitlement programs.

“Why did you duck?” Ryan asked sharply. “Why are you not taking
this opportunity to lead?”

“We all know the debt is becoming a crisis,” he said.

Ryan also said the administration uses very optimistic growth
assumptions to narrow the deficit by the middle of the decade. “You are
expecting very robust growth,” he said skeptically to Lew.

Lew said the administration’s FY12 fiscal “puts the nation on a
path of fiscal sustainablity,” but said bipartisan negotiations will be
needed to tackle medium and long-term fiscal issues.

“This is the first step in the process…The president’s budget is
the starting point,” Lew said. “There are very very tough choices in
this budget,” he added.

House Speaker John Boehner said this week that the House GOP budget
will include entitlement reforms. “Our budget will lead where the
president has failed, and it will include real entitlement reforms so
that we can have a conversation with the American people about the
challenges we face and the need to chart a new path to prosperity,” he
said.

The Speaker offered no details on what types of entitlement reform
the House GOP will propose.

But Senate Minority Leader Mitch McConnell seemed more cautious
this week about the GOP taking the lead in pushing entitlement reforms.
“We know and will say again that entitlement reform will not be done
except on a bipartisan basis with presidential leadership,” McConnell
said.

The Committee for a Responsible Federal Budget, in an assessment of
Obama’s budget, concluded that it “offers too little at a time when so
much is needed.” It added that “this budget shirks away from making the
hard choices and instead focuses in on non-security discretionary
spending.”

The Concord Coalition also the Obama budget falls short. “While
there are positive aspects to this budget, dealing with the nation’s
unsustainable structural deficit is not one of them, Once again, the
entitlement and tax reform agenda is left to another day.”