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Obama Avoids Entitlements in Fiscal 2012 Budget Request

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Government Printing Office workers help prepare copies of President Barack Obama’s fiscal 2012 budget Thursday.

Community Development Block Grants would be cut by $300 million, for example, and home energy assistance for the poor would be chopped in half, saving $2.5 billion. Pell Grants for summer school would disappear.

The belt-tightening extends to the Pentagon, with $78 billion in cuts that Defense Secretary Robert Gates has proposed. Coupled with dramatically lower costs in Iraq, overall defense spending will shrink 5 percent next fiscal year.

A roughly $300 billion proposal would cap tax deductions for the wealthy at 28 percent, which would offset three years of patches to the alternative minimum tax. Obama proposed the tax increase when Democrats were in charge last year, to no avail.

The budget request would pay for a two-year patch to doctors’ pay under Medicare by cutting $62 billion elsewhere. There is also a medical malpractice initiative, an issue sure to come under fire from his fellow Democrats.

Obama’s budget assumes that the 2001 and 2003 tax cuts will expire at the end of 2012 for the wealthy. The Bush-era tax cuts were extended for all income brackets for two years under the deal Obama and Senate Republicans negotiated last year, although the administration had wanted to limit the extension to income up to $250,000.

The blueprint isn’t all pain. Obama wants to start an ambitious nationwide plan for high-speed rail, launch a national wireless broadband network, and modestly increase funding for energy and health research.

Those proposed investments face a tough road in the House. The House GOP’s fiscal 2011 spending bill includes billions in cuts to science budgets, and Speaker John Boehner (Ohio) has blasted Obama’s talk of new investments as wasteful government spending.

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