The Obama administration released its fiscal year 2012 budget yesterday, even as Congress continues to grapple with funding for the remainder of the fiscal 2011 year (which ends in October). The $3.7 trillion budget makes key investments in infrastructure, scientific research, education, and job creation, while still reducing the deficit in the medium term and stabilizing the debt-to-GDP ratio, two key steps to getting the long-term structural deficit under control. “Even as we cut out things that we can afford to do without, we have a responsibility to invest in those areas that will have the biggest impact in our future,” President Obama said in a speech yesterday. Of course, Republicans in Congress immediately criticized the administration for not proposing enough in the way of budget cuts, claiming that the lack of cuts will result in job losses. “It’s going to destroy jobs because it spends too much, it borrows too much, and it increases the deficit,” Speaker of the House John Boehner (R-OH) said on Laura Ingraham’s radio show. But at the same time that they’re falsely accusing the administration of crafting budget policies that will cause unemployment to rise, House Republicans have proposed a deeply irresponsible spending plan for the remainder of fiscal year 2011 that, if enacted, would result in deep cuts to vital and popular programs that promote competitiveness and job creation, while simultaneously harming some of the nation’s most vulnerable residents.

KEY INVESTMENTS: As Center for American Progress economist Adam Hersh wrote, “If there is one point on which all economists can agree, it is that investment — in infrastructure, in research and innovation, and worker productivity — is the foundation for economic growth.” To that end, the Obama administration included in its budget proposal $556 billion for a six-year surface transportation authorization. The administration proposed $8 billion next year to invest in passenger and high-speed rail and $30 billion for a National Infrastructure Bank. The infrastructure funding drew the support of the National League of Cities, but even with those spending boosts, the nation would still be far short of fulfilling what the Army Corps of Engineers has assessed as roughly $2.2 trillion in infrastructure needs. The administration’s proposed budget would also include $8 billion “to boost electric cars, wind and solar power, [and] clean-energy manufacturing,” as well as $200 million in subsidies for energy efficiency and renewable energy loan guarantees. In the education realm, the Obama administration proposed a new round of the Race To The Top program — this time making competitive grants for education reform available to individual districts, instead of entire states — while increasing money for special education, school turnaround grants, and early intervention services for toddlers with disabilities. The budget also preserves the maximum Pell Grant, as well as the Teacher Incentive Fund and the Improving Teacher Quality State Grants. “The administration’s budget generally reflects the principle that we cannot out compete the rest of the world if we are leaving one-third of our citizens behind,” CAP’s Half in Ten manager Melissa Boteach noted. However, the proposed budget also includes some disappointing cuts, reducing both the Low-Income Home Energy Assistance and Community Services Block Grant by 50 percent. “These services both stabilize families in crisis and provide a pathway to long-term economic security,” Boteach wrote.

RESPONSIBLE DEFICIT REDUCTION: The release of the budget resulted in a predictable outcry from self-styled deficit hawks, who moaned that the administration did not attempt to reduce the deficit even more drastically than it did. “Regrettably, this budget keeps our nation on a reckless fiscal path, representing more unaffordable debt and spending,” said Sen. Orrin Hatch (R-UT). The budget also received fire from Sen. Kent Conrad (D-ND), who said we need “a much more robust package of deficit and debt reduction over the medium and long term.” Alice Rivlin, a member of the now-completed Presidential deficit commission, claimed, “I would have preferred to see the administration get out front on addressing the entitlements and the tax reform that we need to reduce long-run deficits.” However, the President’s budget does responsibly reduce the deficit. As Center for American Progress Associate Director of Tax and Budget Policy Michael Linden wrote, “The President’s budget goes exactly as far as it should, showing deficits declining from a high of 10.9 percent of GDP down to 3.2 percent of GDP by 2015.” “His deficit reduction eases in to allow the economic recovery to get more momentum before the deficit-cutting measures start to bite. And, although there are lots of spending cuts, there are lots of investments in the economy that can produce returns in job creation and economic growth,” added CAP Vice President for Economic Policy Michael Ettlinger. Even so, the administration left some big fish on the table in terms of possible deficit reduction, including plenty of wasteful tax expenditures and the bloated defense budget (from which the administration only suggested $78 billion in savings over five years, which only slows DOD’s rate of growth).

GOP‘S SLASH AND BURN: As the President rolls out his budget, House Republicans are using their new majority to try to cut spending for the remainder of the 2011 fiscal year. (Currently, the government is operating under a continuing resolution that keeps funding consistent at the 2010 level.) After initially releasing roughly $30 billion in cuts (below the fiscal 2010 level), House Appropriations Committee Chairman Hal Rogers (R-KY) was forced to go back and find further reductions after a revolt from members of his own party. The roughly $60 billion in savings that the GOP found, on its second attempt, would severely undermine job creation — causing the loss of hundreds of thousands of jobs even as unemployment is at 9 percent — while also cutting vital and popular programs. According to the Economic Policy Institute, the GOP’s first round of proposed budget cuts alone would cause the loss of 600,000 jobs. With their proposed cuts, House Republicans take aim at everything from Pell Grants and special education funding to WIC, which provides nutrition assistance for infants and low-income pregnant women, and other programs benefiting women and children. They also proposed cutting half of federal job training programs, more than one billion from community health centers (which they used to call “essential”), and slashing clean-tech and energy investments by nearly 30 percent, “devastating this growing but immature industry that struggled during the Great Recession.” Programs that they propose completely eliminating range from investments in high-speed rail and weatherization assistance to assistance for homeless veterans. Finally, at the same time that some Republicans decided to criticize the President for not reducing the deficit fast enough, they proposed new, unfinanced tax cuts that would cost hundreds of billions of dollars.