November 30, -0001
Obama official says new budget won't be pain-free
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The administration has said that its five-year freeze will save $400 billion over the next decade with many programs slated for even bigger cuts. Community development block grants would be trimmed by $300 million, the government's program to help low-income people pay their heating bills would be cut in half for a savings of $2.5 billion, and a Great Lakes environmental restoration program would but cut by 25 percent to save $125 million, according to an Office of Management and Budget summary.

That document also said that the budget would cut the Pentagon's spending plans over the next decade by $78 billion with reductions in various weapons programs deemed unnecessary including the C-17 aircraft, the alternative engine for the Joint Strike Fighter aircraft and the Marine expeditionary vehicle.

The OMB document also listed $1 billion in cuts in grants for large airports, almost $1 billion in a reduction in support to states for water treatment plants and other infrastructure programs and savings from consolidating public health programs run by the Center for Disease Control and various U.S. Forest Service programs.

The administration will also propose saving $100 billion from Pell Grants and other higher education programs over a decade through belt-tightening with the savings used to keep the maximum college financial aid award at $5,550, according to an administration official who spoke on condition of anonymity in advance of the budget's Monday release.

The OMB summary said that the $1.1 trillion deficit savings would reduce the deficit as a percentage of the total economy to 3 percent of GDP by the middle of this decade. The deficit is projected by the Congressional Budget Office to surge to an all-time high of $1.5 trillion this year, which would be 9.8 percent of the economy and mark the third consecutive $1 trillion-plus budget gap.

The surging deficits reflect the deep 2007-2009 recession, which cut into government tax revenues as millions were thrown out of work and prompted massive government spending to jump-start economic growth and stabilize the banking system.

Republicans scored significant victories in the November elections by attacking the soaring deficits while the Obama administration argued that the spending was needed to keep the country from falling into an even deeper economic slump.

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Associated Press writers Jim Kuhnhenn, Darlene Superville and Andrew Taylor contributed to this report.

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Copyright 2011 . All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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