$1 Trillion Question: Who Will Buy President Obama's Budget?

Wielding The Axe
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President Obama is poised to release his budget plan for next year, but don't expect it to make many Americans happy -- even though the White House tells ABC News that it will cut the deficit more than $1 trillion over the next decade.

In a move that may be aimed at outflanking Republicans, the president will propose some surprisingly deep cuts. Then the President would use those savings to pay for programs he says he believes will help improve the economy.

"My budget freezes annual domestic spending for the next five years -- even on programs I care deeply about," Obama said Saturday during his weekly address.

Republicans say they aren't buying it.

"We're broke. What's really dangerous is if we continue to do nothing and allow the status quo to stay in place," House Speaker John Boehner said today on NBC's "Meet the Press." "When are we going to get serious about cutting spending?"

A White House official confirms to ABC News that the president's 2012 budget will include cuts to clean water programs, home heating assistance, and Pell grants that help students pay for college.

Some of these programs are sacred to liberals.

"You are going to have progressives saying you are cutting all these important programs that really help people, conservatives saying you are not cutting nearly enough, and deficit hawks saying this doesn't do nearly enough to fix the overall budget situation," says Maya MacGuineas of the Committee for a Responsible Federal Budget, a non-partisan group.

Obama plans to use the savings from those cuts to pay for programs the White House believes will help stabilize the economy.

The budget will also include more money for high speed rail, new education programs and infrastructure improvements, including extending the Internet to rural areas.

That new spending is one reason Republicans may consider the president's plan "dead on arrival."

"Look, if he is talking about coming and having new spending, so-called investments, that is not where we are going," Republican budget chair Rep. Paul Ryan said on "Fox News Sunday."

The savings the president proposes will be a mix. Two thirds will come from budget cuts, one third will be in the form of tax increases. And Obama will embrace a Pentagon plan to trim defense spending by $78 billion over the next five years.

The White House already anticipates a backlash from its Democratic base.

"The notion that we can do this painlessly is -- it's not possible to do it painlessly. We are going to make tough choices," White House Budget Director Jack Lew said on CNN's "State of the Union."

But the White House and Republicans are arguing over a small portion of the $3.5 trillion budget. Only 15 percent of the budget is discretionary funding. A large portion of the rest is spent on entitlements: Medicare, Medicaid and Social Security.

"What we are witnessing is a political dance," MacGuineas says. "The budget we will see released tomorrow will probably bring the deficit down in the short run. It won't do anything to bring it down in the long run, and that means all this work that we will go through now is not going to fix the overall situation unless they focus on entitlement reform."

Neither the White House, nor Republicans have offered concrete entitlement reform proposals.

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