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Obama's Budget a Mixed Bag

Proposals could affect Medicare and other programs

President Obama offered a $3.7 trillion budget that would make cuts to some programs to help chip away at the nation's deficit but increase others that he said are crucial to America's economic future.

Republicans, energized by a large class of fiscally conservative freshmen in Congress, slammed Obama's budget, proposed Monday, as a spending binge the nation cannot afford.

Obama's blueprint would cut $400 billion during the next decade in domestic programs, but it does not take on the politically difficult proposals his own deficit commission has said are needed to reform Social Security and Medicare.

The president would freeze discretionary spending, outside of security costs, for five years. But it's not an across-the-board cut — some programs would come out winners and some big losers. The Low Income Home Energy Assistance Program (LIHEAP), for instance, would be cut nearly in half from $5.1 billion. Housing for older Americans would be cut $68 million to $757 million, with most of the cuts coming from new construction for needy seniors.

"It's mixed," said Cristina Martin Firvida, director of economic security for AARP, who said she was relieved that Meals on Wheels and meals for senior centers were not cut. "There are things here we like and things here we don't like."

The nation needs to "start living within its means," Obama told children at Parkville Middle School and Center for Technology in Baltimore. But education, infrastructure and research programs need to be beefed up at the same time, he said.

"I'm convinced that if we out-build and out-innovate and out-educate, as well as out-hustle the rest of the world, the jobs and industries of our time will take root here in the United States," Obama said in remarks before addressing students.

Republicans, who now control the House, decried Obama's spending increases and likely will put up roadblocks to those plans.

"The president's budget will destroy jobs by spending too much, taxing too much and borrowing too much," said House Speaker John A. Boehner of Ohio. "The president's budget isn't winning the future, it's spending the future. … Our goal is to listen to the American people and liberate our economy from the shackles of debt, over-taxation and big government. "

Before Congress even begins considering Obama's budget, which is for the year that starts Oct. 1, it must finish work on the current-year budget. The federal budget is funded under a temporary measure that runs out in early March.

Republicans have proposed cutting $100 billion in discretionary spending in the final seven months of this fiscal year. And Obama's budget for next year will have rough sledding in the House, where Tea Party-backed lawmakers are intent on shrinking the size of government.

Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, said Obama's budget "accelerates our country down the path to bankruptcy" and nearly doubles the government in size compared to when Obama took office. "Where the president has fallen short, Republicans will work to chart a new course — advancing a path to prosperity by cutting spending, keeping taxes low, reforming government and rising to meet the challenges of our time," Ryan said.

A presidential deficit commission laid out a dire scenario of federal red ink if the government doesn't cut spending and raise more revenue. It set out a plan for closing the deficit within the decade with controversial approaches, such as raising the retirement age for Social Security and closing a number of major tax loopholes. Few of those were included in the Obama blueprint.

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