Obama’s proposed budget aims to lessen deficit, boost educational resources

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President Barack Obama’s proposed $3.7-trillion budget for the upcoming fiscal year continues to draw criticism from some Republicans and others.

The proposal includes $1.6 trillion in new revenue from an extension last December of the Bush-era tax cuts. Obama proposed ending subsidies to oil and gas companies, new taxes on hedge fund managers and other taxes on wealthy individuals and businesses.

“The only way we can make these commitments (to education, etc.) is if the government starts living within its means,” Obama said during his budget presentation in February.

The nation’s deficit, which will hit $1.6 billion this year, will remain unaffected under Obama’s plan until 2013. The deficit will then fall to $1.1 trillion, and settle at $600 billion through 2018, as outlined in his plan.

U.S. Rep. Dave Camp, R-Midland, said the president is on a deficit-spending spree.

“Rather than setting the stage for broad-based, pro-growth tax reform, this budget goes in the opposite direction with more tax hikes,” Camp said in a statement.

Obama proposed a freeze on domestic spending, and stressed that this freeze will bring spending levels to what has not been seen since Dwight D. Eisenhower’s presidency. He also said he would veto any bill with earmarks.

Obama called his proposal a “down payment” on the deficit, and said, in order to fully eliminate it, both parties will need to join together.

Economics Professor Paul Natke said the president’s approach is correct.

“From a narrow-minded economist’s standpoint, what he should do is raise taxes and cut spending to reduce the deficit,” Natke said.

Natke said Republicans’ concerns with the federal budget deficit are also correct because it will have long-term effects on the economy.

“The budget — it’s a set of choices and you’re limited as to what you can spend, but they can borrow as much as they want,” he said. “It’s an interesting political process.”

Obama requested $4.5 billion more for education than he did in his previous year’s proposal, with most of the additions going toward primary and secondary education.

The president recommended the amount given to students receiving Pell Grants remain the same at $5,500, and proposed eliminating a provision allowing students to receive two Pell grants in a single year.

The U.S. Department of Education anticipates 9.6 million students will be eligible for Pell grants next year, up from 6 million in 2008.

The administration also proposed eliminating subsidies for graduate students with loans. Conversely, the Republican-controlled House of Representatives proposed a 15-percent drop in Pell grant funding to $4,705.

Total education resources will grow to $77.4 billion, an 11-percent increase over last year.

Reaching an agreement on the budget is where the challenge lies, Natke said.

“The problem is always political … which programs do you cut and what programs do you raise?” he said. “Economically, the country would be better off with lower deficits. If we are still struggling with slow economic growth, more economic stimulus may be appropriate. A large deficit is an indication you’re trying to stimulate (the economy).”