Obama budget counters Republican measure; long budget fight expected

Dueling spending plans collided yesterday, with President Obama releasing a fiscal 2012 budget that Republicans mocked for increasing clean energy funding. Today, they prepare to launch their epic spending cuts in the House.

The administration described Obama's $3.7 trillion budget package as a painful exercise in defunding, including a whack at U.S. EPA that reduces its funding 13 percent, leaving the agency with $9 billion next year. The administration altogether is terminating or trimming 200 programs, for a savings of $30 billion.

Some cuts, like a program that helped replace old diesel engines in school buses and trucks with cleaner technology, sparked rare outbursts of opposition from the president's own party.

"This program is a huge success," Sen. Tom Carper (D-Del.) said of the terminated Diesel Emissions Reduction Act, which the House and Senate renewed in December. "I am disappointed that just two months after reauthorizing this successful program, the administration eliminated funding for it."

But the cuts aren't nearly enough for Republicans, who are decrying the budget blueprint as proof that Obama is ignoring the results of the midterm elections, which propelled 87 new GOP members into office.

"He's raising spending everywhere," chided Rep. Paul Ryan (R-Wis.), chairman of the Budget Committee. "This is not an austere budget."

The administration didn't meddle extensively with the titans of outlay, namely the entitlement programs of Social Security, Medicare and Medicaid. Instead, the president offered a five-year spending freeze for discretionary programs that is supposed to save $400 billion by 2022.

The exception is in clean energy, education and transportation infrastructure. While many agencies are seeing cuts, the Department of Energy would receive a 12 percent increase over 2010 levels, largely derived from oil and gas tax breaks amounting to $46 billion over 10 years.


"This reflects increases for priority areas such as clean energy, nuclear security, and research and development," the budget says.

House GOP: focus on nuclear

Among the initiatives is $5.4 billion for clean energy research, including a doubling of funding for energy efficiency programs and a 70 percent rise in renewable energy research. That includes $457 million for solar energy, $341 million for biofuels and biomass, and $102 million for geothermal research.

The budget also provides $853 million for nuclear energy programs, like research around modular reactors. That might be one of the few things that Republicans and Democrats agree on.

The House GOP's continuing resolution, which seeks to slash $100 billion from Obama's budget plan for 2011, would also benefit the nuclear energy industry by continuing federal loan guarantees for the construction of new plants. That's where the similarities end, however, because the Republican plan would end similar guarantees for renewable energy projects, according to a solar group.

"In its current form H.R. 1 [the continuing resolution] would likely kill all clean energy projects with pending DOE loan guarantee applications, causing the loss of tens of thousands of jobs and many other benefits," Rhone Resch, president of the Solar Energy Industries Association, wrote in a letter to House Speaker John Boehner (R-Ohio) yesterday.

Resch said up to 26 projects could be canceled, "not only eliminating the construction jobs associated with these projects, but also impacting the manufacturing orders to our domestic U.S. solar industry."

Some see a battle line in that plan. The question is, if Republicans see a future with expanded nuclear energy, and Obama does too, but also with more renewables, can the two sides compromise?

"It's going to be hand-to-hand combat for every dollar," said Paul Bledsoe, senior adviser to the Bipartisan Policy Center.

Inviting a shutdown or 'changing the culture'?

Skirmishing will begin tomorrow, when the House begins debate on the continuing resolution. But the conflict will likely last all year, as both sides position themselves for elections in 2012.

"We are changing the culture here," Majority Leader Eric Cantor (R-Va.) said yesterday. "You're either for spending cuts, or you're not."

The Republicans will seek to score an early victory by slashing spending for the remaining seven months of the fiscal year, and then move to their own budget proposal for 2012, probably in April. More cuts will be coming.

Democrats, meanwhile, will detail their own continuing resolution soon, while promoting themselves as the responsible negotiators, compared to a Republican Party made more extreme by its tea party influence. They will also keep warning that the GOP is steering the nation toward a government shutdown with its excessive spending cuts.

The continuing resolution, or a short-term extension, must be passed before March 4, when current spending authority ends.

Republicans, however, have begun pushing back, saying the only lawmakers talking about a shutdown are Democrats.

"Why is it ... that you're only hearing 'shutdown' from one side?" Cantor said. "We have consistently said it's not our intention to shut down government. That is political talk, and we ought to get that off the table, and let's go about the real business of trying to cut spending."

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