President Obama's 2012 budget, released Monday morning, doesn't touch thorny issues like entitlements or tax reform and is sure to provoke the ire of Republicans who want deeper reductions in spending. But it does propose a five-year
freeze of non-security discretionary spending and cuts to more than 200 federal programs in order to reduce the deficit by $1.1 trillion over 10 years. What painful choices is the White House ready to make?
budget would cut $100 billion from Pell Grants--the federal program
that dispenses aid to college students from low-income families--and
other higher-education programs through 2021, the Washington Post's
Lori Montgomery reports.
Graduate student loans will begin accruing interest while students are
still in school rather than upon completion of a degree program, as had
previously been the case. The administration will also end Pell Grants for summer school students. Montgomery points out that demand for Pell grants rose during the recession and that the program is facing a shortfall.
Low-income heating assistance will be cut nearly in half--i.e. by $2.5 billion--according to the National Journal's Marc Ambinder.
Ambinder explains that for most Democrats and many Republicans,
the program "carries an emotional resonance as it was designed to keep
poor people, particularly older poor people, cool in the summer and
warm in the winter." He adds, though, that "critics say that the
program is poorly administered and that, contrary to intentions, it's
become a subsidy for energy companies, most of whom are prohibited by
law from turning off services to delinquent bill-payers during weather
COMMUNITY DEVELOPMENT GRANTS
Community Development Block Grants, which help cities and counties finance housing, sanitation, and economic development projects in low- and moderate-income neighborhoods, will be cut by $300 million.
The Boston Globe's Andrew Ryan explains that "for decades, the community development grants enjoyed bipartisan support because the money allowed federal lawmakers to support bread-and-butter projects and small businesses back home directly."
COMMUNITY SERVICE GRANTS
The Obama administration will also slash financing for grants to grassroots groups working in poor communities, White House budget director Jacob Lew notes in The New York Times.
Lew explained the rationale behind the cut:
These are the kinds of programs that President Obama worked with when he was a community organizer, so this cut is not easy for him.
Yet for the past 30 years, these grants have been allocated using a formula that does not consider how good a job the recipients are doing. The president is proposing to cut financing for this grant program in half, saving $350 million, and to reform the remaining half into a competitive grant program, so that funds are spent to give communities the most effective help.