Obama sets stage for budget battle

Even as he proposes cuts to rein in spending in 2012, President Obama is calling for strategic increases in areas like cancer research and food safety that highlight a vision of government in sharp conflict with the Republicans who have gained power in Congress.

By proposing billions of new dollars to educate children, regulate financial markets and develop cleaner fuels, Obama has drawn battle lines that will require congressional Republicans to publicly fight him over services widely considered important government functions.

Some federal agencies, including the Food and Drug Administration, the Securities and Exchange Commission and the Energy Department, would see increases under the budget the president unveiled Monday.

That prospect drew immediate fire from congressional Republicans, who are pushing for deep cuts in many of the same agencies and have promised to block Obama’s priorities, including implementation of the new healthcare law, which will require more than $400 million next year.

“It would be better if we did nothing than actually pass this budget,” Rep. Paul D. Ryan (R-Wis.), chairman of the House Budget Committee, said Monday. Ryan and other Republicans argue that cutting government spending is the best path to economic recovery.

Obama insists it is vital to continue investing in education, healthcare and infrastructure to assure a more stable and durable economic recovery. In an appearance to tout new education spending Monday, he likened the choices to those facing American families.

“If things get a little tight, you may stop going out to dinner or stop going to the movies,” the president told children at a middle school in Baltimore. “But you’re still going to make sure that you’re paying for the things that are really important, like heat, or fixing the roof, or your parents are setting money aside for your college education. We’ve got to do that same thing as a country.”

His $3.7-trillion spending plan uses a mix of spending cuts and tax increases to reduce deficits, though it would still leave the federal government $1.1 trillion in the red next year.

Overall, the budget is $90 billion below last year’s spending plan, which was never approved by Congress.

The president proposes to increase federal spending on the Head Start preschool program for poor children, bringing the program’s budget to $8.1 billion in 2012, up nearly 13% from 2010.

By contrast, House GOP lawmakers last week proposed cutting the program nearly 14% this year as part of $100 billion in cuts it wants to make to the ongoing 2011 fiscal year budget.

Obama’s 2012 budget would also boost funding for the National Institutes of Health to nearly $32 billion, a bump of more than 2% that would expand research for cancer, diabetes, infectious diseases and mental health. The House GOP plan would cut NIH funding by more than 5%.

Obama’s budget includes a 28% increase in funding for the Securities and Exchange Commission, boosting its budget to $1.4 billion in 2012.

That would allow the agency to hire about 780 new employees as it expands oversight of financial markets and drafts dozens of regulations designed to head off another financial meltdown.

The smaller Commodity Futures Trading Commission would get an 82% boost, to $308 million, as it takes on greater oversight of complex financial derivatives that many believe helped fuel the economic collapse.

The Food and Drug Administration’s budget would surge 33%, to nearly $4.4 billion in 2012, as the agency expands oversight of the nation’s food supply under a law passed last year. House Republicans have proposed trimming that agency’s budget by 7%.

The Energy Department budget would expand nearly 12% to $29.5 billion, with new funding for research into “clean” technology and energy-efficiency programs.

Obama and his Cabinet secretaries defended the new spending Monday as vital investments even during difficult fiscal times. And they pointed to cuts elsewhere in the budget that offset some of the new spending.

“We want to work with the House of Representatives to cut spending and the deficit,” Environmental Protection Agency Administrator Lisa P. Jackson told reporters. “But we want to make sure we don’t undermine our ability to protect Americans’ health and the environment.”

That position carries an element of risk for the administration. While Republicans argue that budget cuts immediately return money to taxpayers, the White House must show the worth of the long-range investments it touts.

Still, the administration strategy was welcomed by an array of interest groups Monday.

Dr. Ralph Sacco, president of the American Heart Assn., called the increased NIH funding a “welcome sign that the administration remains committed to science and innovation.”

Barbara Roper, director of investor protection for the Consumer Federation of America, said Obama’s proposed SEC funding, while falling short of the levels authorized in the new financial reform law, allows for some “belt-tightening at the agencies, but without putting them on a starvation diet.”

At a time when Republicans are pushing historic cuts in federal spending, however, belt-tightening appears unlikely to be enough.

House Majority Leader Eric Cantor (R-Va.) said Monday that the president’s efforts to direct money to selected priorities were misguided.

“The problem is the spending that he identifies and that he wants to cut out, he goes and re-spends to priorities that he feels are appropriate for the American people. That’s in direct contrast to the way that we operate,” Cantor said.

“We don’t think that all good ideas come from Washington. We feel that you ought to allow people who are earning the money, who are making the money, to keep more of it.”

noam.levey@latimes.com

Neela Banerjee, Don Lee, Lisa Mascaro, Jim Puzzanghera and Andrew Zajac in the Washington bureau contributed to this report.