President Obama today proposed a budget for the 2012 fiscal year that would cut this year's estimated $1.6 trillion deficit by more than half over the next five years while tweaking several of his administration's core energy and environmental efforts.

The White House proposal, which includes trims at U.S. EPA and increases at the Department of Energy of roughly equal proportional size, amounts to an opening salvo in a capitalwide fight over federal spending priorities that could swamp any bids to achieve consensus on other issues this year. Indeed, Republicans met Obama's pitch -- centered on outlays of $3.7 trillion that would only rise over time -- with unified dissatisfaction.

In remarks at a Baltimore middle school today, Obama touted the savings his advisers would achieve by improving government efficiency but warned that "some tough choices," including cuts to programs he holds dear, also would be in the offing.

"I'm also looking forward to working with members of both parties to take steps beyond" the five-year discretionary spending freeze signaled in last month's State of the Union, Obama said, "because cutting annual domestic spending won't be enough to meet our long-term fiscal challenges."

Overall, the White House plan for the fiscal year that begins Oct. 1 projects that the record deficit in 2011 would fall by more than $500 billion by 2012, or nearly 4 percent when expressed as a share of the nation's gross domestic product (GDP). The five-year freeze would save $400 billion, with some of the remainder of the administration's estimated cuts coming from the comparatively larger mandatory side of the federal ledger.

Senate Majority Leader Harry Reid (D-Nev.) and House Minority Whip Steny Hoyer (D-Md.) crystallized the emerging message in their caucuses by describing the White House proposal as a "stark" and "strong contrast," respectively, to the $60 billion in spending cuts offered late Friday by Republicans in the House.

The House spending plan is poised to come to the floor tomorrow, slicing U.S. EPA's budget by more than twice the amount envisioned by Obama and blocking implementation of its greenhouse gas emissions rules (E&E Daily, Feb. 14).

"Their spending bill for the rest of this fiscal year would make indiscriminate and short-sighted cuts to the investments our economy needs to stay competitive," Hoyer said in a statement.

Agency by agency

EPA would receive $9 billion in the White House plan, a decrease of $1.3 billion, or about 12 percent, from the administration's previous request. Among the areas taking the brunt of that cut are the agency's revolving funds for states' water infrastructure and its Great Lakes restoration initiative (see related story).

DOE would see $29.5 billion next year from the administration, a 12 percent bump from its 2010 funding levels that includes credit subsidies for up to $2 billion in loan guarantees for renewable energy and efficiency projects. Oil, gas and coal companies, meanwhile, would take a $4 billion hit to tax breaks that, as the White House argued, "impede investment in clean energy sources and undermine efforts to address the threat of climate change" (see related story).

Other departments are in line for maintenance of high-profile energy and environmental goals. For instance, while the Justice Department has a $3 billion budget for litigation, the administration plans to maintain "supplemental funding for investigations and additional attorneys" in relation to the Deepwater Horizon litigation, according to budget documents.

Those fossil-fuel subsidy cuts, however, epitomize the political reality behind many of the White House's proposals: Congress is unlikely to go along, particularly given the partisan schism between Senate Democratic leaders and their House GOP counterparts, who view their midterm election wins as a voter mandate for across-the-board cuts.

Setting the tone for his party, House Majority Leader Eric Cantor (R-Va.) took aim at Obama for not attempting many of the major shifts in spending endorsed by the bipartisan deficit commission that the White House convened last year.

"Today, the president missed a unique opportunity to provide real leadership by offering a budget that fails to address the grave fiscal situation facing our country," Cantor said in a statement.