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{{US federal budget}}
{{US federal budget}}

Revision as of 13:55, 20 July 2011

2012 (2012) Budget of the United States federal government
SubmittedFebruary 14, 2011
Submitted byBarack Obama
Submitted to112th Congress
Total revenue$2.627 trillion (estimated)
Total expenditures$3.729 trillion (estimated)
Deficit$1.101 trillion (estimated)
Websitehttp://www.gpoaccess.gov/usbudget/fy12/index.html US Government Printing Office
‹ 2011
2013›

The 2012 United States federal budget is the United States federal budget to fund government operations for the fiscal year 2012, which is October 2011–September 2012. The budget is the subject of a spending request by President Barack Obama, while the Republican-held House of Representatives and the Congressional Progressive Caucus[1] have announced competing plans for the 2012 budget. The budget plans are intended to focus on deficit reduction, but differ in their changes to taxation, entitlement programs, defense spending, and research funding.[2][3] The actual appropriations for Fiscal Year 2012 must be authorized by the full Congress before it can take effect, according to the United States budget process.

Overview

Early proposals

In February 2010, President Barack Obama formed a bipartisian commission, called the Bowles–Simpson Commission, to recommend steps that could be taken to reduce future budget deficits. The commission released its report on November 10, 2010, which recommended deep domestic and military spending cuts, reforming the tax system by eliminating many tax breaks in return for lower overall rates, and reducing benefits for Social Security and Medicare. The plan did not receive the supermajority vote within the commission which it needed to be directly sent to Congress, and portions of the plan were rejected by both parties.[4]

The Obama administration proposed his 2012 budget on February 14, 2011. Obama's budget proposal aimed to reduce annual deficits to more sustainable levels by making selective cuts in spending, while increasing support in specific areas such as education and clean energy to foster long-term economic growth. The plan did not contain specific proposals to rein in spending on entitlement programs such as Medicare, Medicaid, and Social Security, which are expected to make up much of the increase in the deficit in future years. The budget represented a shift from the Obama administration's strategy in previous years of using increased government spending, such as the American Recovery and Reinvestment Act of 2009, to combat the late 2000s recession. The 2012 budget plan was instead projected to reduce deficits by $1.1 trillion over the next ten years. Republicans criticized the plan for not going far enough to reduce future deficits.[5] A motion to proceed on President Obama's 2012 budget proposal was defeated in the Senate by a margin of 0-97 votes on May 25, 2011, the same day that the Ryan budget was also defeated.[6]

A competing plan, called The Path to Prosperity, was announced by House Republicans, led by Representative Paul Ryan, on April 5, 2011. This plan would reportedly cut $5.8 trillion in spending over ten years, but would also reduce tax income by $4.2 trillion below current projections. The plan would make no further reduction in defense spending beyond the Obama administration's plan, but would make major changes to Medicare, Medicaid, and Social Security which would pass much of the cost of these programs onto individuals. It would also cut energy research and other applied research and development. This plan was criticized for disproportionately cutting programs which benefit the disadvantaged and stifling innovation, while not cutting defense spending further and containing deep tax cuts.[3][7] The House Republican plan was defeated in the Senate by a margin of 40-57 votes on May 25, 2011.[8]

In response to the Republican plan and a recent deal on the 2011 budget, President Obama on April 13, 2011 presented an alternative plan in a major policy speech. This new plan would cut deficits by $4 trillion over 12 years through a combination of broad spending cuts and tax increases, including the expiration of the Bush tax cuts for incomes over $200,000 and proposed a cap on increases in Medicare and Medicaid spending. Obama criticized the Republican plan for enriching the wealthy through tax cuts while placing a greater economic burden on the elderly through Medicare cuts. Obama's plan was criticized by Republicans for its large cuts in defense spending and for its lack of specific detail.[2] On June 23, at a hearing of the Budget Committee, CBO director Douglas Elmendorf was asked what his agency made of the proposals in that presidential address. “We don’t estimate speeches,” he said. “We need much more specificity than was provided in that speech."[9]

Implications of potential debt limit deal

A controversy arose in July 2011 over the raising of the federal debt limit, with Republicans in Congress demanding spending cuts in the 2012 and subsequent budgets in return for raising the debt limit. On July 19, 2011 by the Republican-led House passed a bill by a margin of 234–190 which would require $111 billion in cuts in 2012 spending levels, exempting defense, Medicare, and Social Security from these cuts, and would limit subsequent federal spending to about 20% of the gross national product as compared to the current 24%. It would require Congress to pass a Balanced Budget Amendment to the United States Constitution before increasing the debt limit. The bill was not expected to pass in the Senate, and President Obam had promised to veto it. An alternate plan proposed by the bipartisan Gang of Six senators and favored by the Obama administration would contain about $3.7 trillion in deficit reduction over the next decade, including both new revenue and large spending cuts, including in entitlement healthcare and defense.[10][11]

Total revenues and spending

The Obama administration's budget contains $2.627 trillion in revenues and $3.729 trillion in outlays for 2012.[12] The Republican plan contains $2.533 trillion in revenues and $3.529 trillion in outlays.[13]

References

  1. ^ "The Congressional Progressive Caucus' "People's Budget"". Retrieved 25 April 2011. {{cite news}}: Cite has empty unknown parameter: |1= (help)
  2. ^ a b Landler, Mark; Shear, Michael D. (14 April 2011). "Obama's Debt Plan Sets Stage for Long Battle Over Spending". The New York Times. p. A1. Retrieved 16 April 2011.
  3. ^ a b Schor, Elana (5 April 2011). "House GOP's 2012 Budget Promises Overhaul of Energy, Environmental Goals". The New York Times. Retrieved 10 April 2011.
  4. ^ Calmes, Jackie (11 November 2010). "Panel Seeks Social Security Cuts and Higher Taxes". The New York Times. p. A1. Retrieved 10 April 2011.
  5. ^ Calmes, Jackie (15 February 2011). "Obama's Budget Focuses on Path to Rein In Deficit". The New York Times. p. A1. Retrieved 9 April 2011.
  6. ^ Klein, Philip (25 May 2011). "Zero Democrats vote to proceed on Obama budget, fails 0-97". The Washington Examiner. Retrieved 26 June 2011.
  7. ^ Calmes, Jackie (6 April 2011). "A Conservative Vision, With Bipartisan Risks". The New York Times. p. A17. Retrieved 10 April 2011.
  8. ^ Bolton, Alexander (25 May 2011). "Senate rejects Ryan budget". The Hill. Retrieved 26 June 2011.
  9. ^ Levin, Yuval (7 July 2011). "'We Don't Estimate Speeches'". The Weekly Standard. Retrieved 26 June 2011.
  10. ^ Calmes, Jackie; Steinhauer, Jennifer (http://www.nytimes.com/2011/07/20/us/politics/20fiscal.html). "roughly $4 trillion in deficit reduction over the next decade". The New York Times. Retrieved 19 July 2011. {{cite news}}: Check date values in: |date= (help); External link in |date= (help)
  11. ^ Silverleib, Alan. [House passes GOP debt measure; Obama praises compromise plan "House passes GOP debt measure; Obama praises compromise plan"]. CNN.com. Retrieved 20 July 2011. {{cite web}}: Check |url= value (help); Unknown parameter |coauthors= ignored (|author= suggested) (help)
  12. ^ "Summary tables" (PDF). Fiscal Year 2012 Budget of the U.S. Government. United States Office of Management and Budget. p. 171. Retrieved 16 April 2011.
  13. ^ "The Path to Prosperity: Restoring America's Promise" (PDF). United States House Committee on the Budget. 5 April 2011. p. 62. Retrieved 16 April 2011.
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