Obama proposes cuts with $3.8 billion 2011 budget

Obama is slated to publish his budget proposal on Monday for the fiscal year starting on October 1.

The White House declined to confirm or deny a report in the New York Times that valued the 2011 budget at $3.8 trillion.

The newspaper said the proposal would include $25 billion for struggling states and provide funding increases for programs at the Energy Department, National Institutes of Health, National Science Foundation and the Census Bureau.

An administration official confirmed to Reuters that the budget would include a 6 per cent increase in civilian research programs.

Obama has promised to tackle record deficits with a spending freeze on some domestic programs. The three-year freeze, which excludes spending on national security and defense programs as well as Social Security, Medicare and Medicaid entitlement programs, would save $20 billion in fiscal 2011 and $250 billion by 2020.

The White House gave a preview of some of the proposed cuts on its blog on Saturday.

"The President believes we need to be honest about what is working and what isn't and that making tough choices about which programs to fund and which to reduce or terminate is part of governing," White House Communications Director Dan Pfeiffer said in a statement.

The country's $1.4 trillion budget deficit is a political albatross for Obama, with Republicans seeking to paint the president as a big spender while the White House emphasises he inherited a $1.3 trillion deficit when he took office.

CUTS, INCREASES

One of the administration's proposals, a repeat from last year, would eliminate the "Advanced Earned Income Tax Credit," which allows eligible taxpayers with children to get a portion of a tax credit paid out in their paychecks.

The White House said only 514,000 people -- 3 per cent of those eligible -- claimed the credit and the error rate for the program was high, with 80 percent of recipients not complying with one or more of the program's requirements.

"This ineffective and prone-to-error program should be eliminated," Pfeiffer said.

Congress rejected that cut last year -- a sign that it may be hard to get through this proposal. The White House said it would fight congressional resistance to cut wasteful programs.

Other changes would include consolidating 38 programs at the Department of Education into 11 to clamp down on inefficiencies and demand greater accountability from states and school districts on grants.

The budget would again target a program originally created to restore land with abandoned coal mines. The program had changed from its original focus and now allowed payments to go to states and tribes that had already cleaned up the mines.

A program related to national parks was also on the chopping block.

The New York Times said space agency NASA's mission to fly back to the moon would be scrapped and some public works projects by the Army Corps of Engineers would lose funding.

The budget would provide more funds for military programs, including the Pentagon's Special Operations forces, the US Army's Black Hawk and Chinook helicopters, and the F-35 Joint Strike Fighter, the paper reported.

The White House declined to identify what each of the programs listed on Saturday would save individually.

Last year Obama proposed terminating or trimming 121 programs to save $17 billion in one year. Congress approved only a portion of those cuts.

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