published Monday, February 7th, 2011

'Tough' budget choices ahead

WASHINGTON -- President Barack Obama's budget director is pointing to spending cuts in three programs as examples of the "tough choices" ahead in the White House budget blueprint that will propose lower spending overall but money for some new initiatives.

Obama supports an environmental program for the Great Lakes and block grants for community service and community development, said Jacob Lew, director of the White House Office of Management and Budget. Yet those programs and others the president favors will be cut, Lew wrote in Sunday's New York Times.

Obama plans to send his spending proposal to Congress on Feb. 14. The proposal is for the budget year that begins Oct. 1.

With the GOP demanding drastic spending cuts, Obama is calling for a five-year freeze on discretionary spending, except for national security. That will reduce the deficit by more than $400 billion over 10 years, according to the White House.

At the same time, Obama seeks more money for spending on education, research, technology and transportation -- spending that the president called "investments we need to win the future" in his State of the Union address.

"To make room for the investments we need to foster growth, we have to cut what we cannot afford," Lew wrote. "We have to reduce the burden placed on our economy by years of deficits and debt."

He added: "Make no mistake: This will not be easy. It will require tough choices since every decision to invest in one program will necessitate a cut somewhere else."

Cited as examples of worthwhile programs that will be cut were:

• The Great Lakes Restoration Initiative, which supports environmental projects. Its $475 million share of the Environmental Protection Agency's budget will be cut by nearly 25 percent, or $125 million.

• Community service block grants, which supports community action organizations in poor communities. Obama is proposing a 50 percent cut in the $700 million program, which will be changed to offer competitive grants to benefit organizations that are most effective.

• Community development block grants, which support housing, sewer and street projects and economic development in low- and moderate-income neighborhoods. The proposed 7.5 percent reduction would reduce its funding by $300 million.

"While we know from mayors and county leaders how important these grants are for their communities, and are very aware of the financial difficulties many of them face, the sacrifices needed to begin putting our fiscal house in order must be broadly shared," Lew said.

Lew said "indiscriminate cuts" should not be made in what he called areas critical to long-term growth, including education, innovation and public works. Such budget reductions, he said, "would stifle the economy just as it begins to recover. That, in turn, would deprive us of one of the most powerful drivers of deficit reduction, a growing economy."

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