Nightly News   |  February 14, 2011

Obama's budget blueprint full of red

Laying out a path to cut the deficit by $1.1 trillion over the next decade, President Obama submitted a $3.7 trillion budget proposal full of tough cuts that would still allow for spending in key areas to keep the country competitive. NBC's Savannah Guthrie reports.

Share This:

This content comes from Closed Captioning that was broadcast along with this program.

>>> president obama unveiled his budget proposal for the coming year, and at a time when a lot of americans are struggling economically and many are worried about this nation's massive national debt , this budget hasn't seemed to satisfy anybody. there are cuts in it that surprise even obama loyalists, and yet as a whole it's not near enough for most republicans. our white house correspondent, savannah guthrie , inside the briefing room in the west wing . savannah, good evening.

>> reporter: good evening to you, brian. there's a phrase the budget aides like to use. we're taking a scalpel to this budget , not an ax. loosely translated it mean the president is proposing cuts, but also spending in key areas he says will keep this country competitive. arriving this morning on capitol hill , the president's 2012 budget . a bright blue book full of red ink . in baltimore today, the push for more spending on education, the president said his budget also makes tough cuts.

>> so what we've done here is make a down payment. but there's going to be more work that needs to be done and it's going to require democrats and republicans coming together to make it happen.

>> reporter: the $3.7 trillion budget has deficits hovering well above $1 trillion through 2012 but lays out a path to cut the deficit by $1.1 trillion over the next decade. some 200 federal programs would be eliminated or see funding slashed, including low income heating assistance, community development block grants and federal funding to big airports. the biggest cut, $78 billion, out of the pentagon over five years.

>> i've worked on seven budgets that presidents have sent to congress. this has the toughest cuts that i have ever worked on. they're very significant.

>> reporter: some progressives are dismayed to see favorite programs like teach for america facing dramatic cuts.

>> unless we're in the president's budget , we'll be zeroed out, so we are barreling toward being zeroed out.

>> reporter: the president is also proposing raising taxes to attack the deficit, lowering how much wealthy taxpayers can write off in itemized deductions, like home mortgage interest, and permanently rolling back the lower bush tax rates for top earners. republicans don't admit they have their own budget to offer but ripped the president for his.

>> and so when you see our leader, the president of the united states , seeing this, knowing it, acknowledging it and ducking it, that is why we're so disappointed today.

>> reporter: yet neither republicans nor the president have offered a plan to deal with the biggest part of the budget , mandatory spending for social security , medicaid and medicare. in washington, we've got kind of a political stalemate with two parties not being willing to compromise and not being really to talk honestly about the kinds of changes that are in our future.

>> reporter: well, this is far from over. the president's budget , brian, really an opening bid. the republicans offer theirs in april.

>> savannah guthrie at the white house for us tonight. savannah,