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Snap Analysis: Winners and losers in Obama's new budget
February 1, 2010 / 11:09 AM / 8 years ago

Snap Analysis: Winners and losers in Obama's new budget

WASHINGTON (Reuters) - The Obama administration put money behind its message on Monday with the release of its fiscal 2011 budget, propping up policy priorities with more cash while setting a tone of caution about the high deficit.

Follow the funding proposals, which must be backed by the U.S. Congress, and a few key points become clear: jobs and education are in; banks and journeys to the moon are out.

Here is a look at some of the winners and losers in the budget for the year starting October 1, based on initial details released by the White House.

WINNERS

* Education - President Barack Obama has spent recent days forecasting budget cuts and highlighting a spending freeze in many domestic programs. Schools, however, got top billing among a handful of areas that would receive more in the new budget.

Message: the administration wants to give teeth to its commitment to improve the U.S. education system, which it sees as crucial to keeping the country competitive.

* Small businesses - The “jobs jobs jobs” message the White House is pushing took on a monetary figure in the budget. The administration set aside $100 billion for small business tax cuts and investments in infrastructure and clean energy. That figure includes $33 billion to help spur hiring and wage hikes.

* Research and Development - The Obama administration likes R&D. The budget includes $3.7 billion in additional funds for civilian research & development, a 6.4 percent increase to $61.6 billion.

This fits in with Obama’s emphasis on “innovation” to create jobs.

* Air travel - The budget puts more money aside for special screening machines at airports and for federal air marshals on international flights

LOSERS

* The wealthy - If your household earns more than $250,000 a year, start saying goodbye to the tax cuts of 2001 and 2003. Obama’s budget lets those cuts expire seeks to raise $678 billion over 10 years to set against the deficit.

* Banks - In case there was any doubt about Obama’s threat to make banks pay taxpayers back for the bailout program, the goal is now enshrined in the budget. The administration expects to earn $90 billion over 10 years from a fee it plans to levy on big financial institutions.

* NASA - So much for another moon landing. Obama proposes scrapping the program that would pursue another trip to the moon, focusing the agency in other directions such as going to Mars. Though Mars is not a bad goal, the elimination of the moon destination makes the agency lose a storied mission.

* Climate change - Though the budget includes money for “clean technologies,” it scraps projected revenue from a cap and trade system to curb greenhouse gas emissions and fight climate change.

That doesn’t mean Obama has given up on the legislation in Congress, but it does send a signal that the White House’s confidence that lawmakers will pass it with an emissions trading mechanism is waning.

Additional reporting by Caren Bohan, Editing by Sandra Maler

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