Category: Budget

In his State of the Union address last night, President Obama urged Congress to invest in critical priorities, reorganize the government, and begin addressing growing debt and deficits in order to ensure US success in the future. Obama proposed increased spending on education, infrastructure, and research and technology — particularly clean energy technology — that the President said would both create jobs and enhance US competitiveness in the world.

 “We need to out-innovate, out-educate, and out-build the rest of the world,” he said. “We have to make America the best place on Earth to do business. We need to take responsibility for our deficit, and reform our government. That’s how our people will prosper. That’s how we’ll win the future.”

The promise of technology heavily underpinned the President’s address, as he emphasized the importance of clean tech, broadband, and science education in achieving his goal. He made the case for continued investment in research funding, and a renewed commitment to immigration reform that’s designed to keep talented foreign workers in the country.

While this all sounds encouraging for the research and higher education communities, the President proposes to pay for those investments by cutting other domestic programs.  He is proposing a five-year freeze on non-security discretionary spending, which he said would save more than $400 billion over 10 years and bring discretionary spending to the lowest level as a share of the economy since the Eisenhower administration. It remains to be seen whether the President can actually motivate Congress into acting on his proposals, some of which appeared in Obama’s prior State of the Union addresses. It was in 2010 that the president sounded similar notes on innovation, taxes and trade, but those reforms often lagged in a Congress more focused on other big-ticket items like healthcare.

One surprise in the President’s address was his threat to veto any legislation that includes earmarks, essentially closing the door on any earmarks for FY12. Democrats in the Senate denounced the President’s call as a power grab that will have little-to-no impact on the federal budget deficit.

But the reality is that Democrats face a political climate that makes it virtually impossible to get any earmarks through this Congress if Obama and Republicans in congress maintain their opposition. Speaker John Boehner (R-OH) has already said that no appropriations bills with earmarks will pass the House, and Senate Republicans have also embraced a moratorium on the pet projects. That means House Republicans, Senate Republicans, and the President would have to cave in if any earmarks are to become law this year.

In other budget news, the House Republicans on Tuesday moved forward in their push to sharply reduce spending and draw contrasts with President Obama’s budget priorities. They adopted a resolution calling for non-security discretionary spending to be cut to FY08 levels or less for the last seven months of FY11. House Republican leaders also announced that they are planning to bring a government funding measure to the floor the same week the president is expected to release his budget (week of February 14^th). During that same week, the House will also consider another stopgap spending measure to fund the government for the remainder of FY11. The current stopgap funding expires March 4th.

The Office of Federal Relations is closely monitoring all of these events and will provide additional information on this site as it becomes available. In the meantime, we are anticipating major programmatic cuts in the President’s FY12 Budget and are currently developing materials to defend those federal programs that the UW works with the most.