Obama announces $17 billion in cuts, less than .5% of total budget

It was only three years ago that then-Sen. Barack Obama voted for a delicate political compromise to pay Wyoming and other coal states $1.5 billion in future years from a mine cleanup fund. On Thursday, as President Obama released details of his 2010 budget proposal, those payments were on the chopping block.

Skeptics have criticized Obama’s proposed cuts as meager, as the 121 programs he wants to trim or eliminate would save $17 billion -- or one-half of 1% of the budget. And the mine program illustrates that many of the cuts are unlikely to happen at all, because of deals already struck in Congress and intense opposition from lawmakers.

“These moneys are Wyoming’s moneys. The White House does not have the right to take them away,” Rep. Cynthia Lummis (R-Wyo.) said. The state’s delegation threatened to sue if the 2006 deal was broken.

Obama also proposed eliminating federal payments to states for incarcerating illegal immigrants convicted of crimes. But Congress rejected that idea when President Bush made the same proposal, and the plan still enjoys strong bipartisan support -- including among officials in California, which receives a large portion of the money.

With its proposed spending cuts, revealed Thursday as the White House released a more detailed picture of its $3.6-trillion budget, the administration is aiming to cast itself as a careful custodian of tax dollars.

But Republicans said the reductions were insufficient.

“It literally will have virtually no impact on the deficit and the debt as we move forward,” said Sen. Judd Gregg (R-N.H.), who earlier this year was Obama’s Commerce secretary nominee before changing his mind. “While you’re taking these few dollars out . . . they are adding back in massive amounts of spending.”

The administration knows that fights over its proposed spending cuts are coming.

Every program has a supporter, Obama’s budget director, Peter R. Orszag, acknowledged Thursday on a White House blog, “and there will be vocal and powerful interests that will oppose different aspects of this budget.”

He told reporters that the cuts were important, no matter how small: “Just like a broken window has been shown to lead to increased crime because of the signal it sends, perpetuating inefficient programs with a shrug of the shoulders undermines confidence in government and wastes resources.”

Among the cuts Obama cited in a morning address was a long-range radio navigation system costing $35 million a year, which he said was obsolete in the age of global positioning satellites. He also proposed cutting the National Institute for Literacy, saying the Department of Education could do the work more efficiently.

Other proposed cuts, such as the money paid to states for incarcerating illegal immigrants, will be harder to guide through Congress. California Gov. Arnold Schwarzenegger recently called the program his top priority for federal criminal justice funding.

Obama also has targeted a $15-million plan for reducing diesel emissions in California, a program championed by Sen. Dianne Feinstein (D-Calif.), who sits on the Senate Appropriations Committee.

Likewise, some proposed Defense Department cuts will probably encounter opposition.

The Pentagon has proposed saving $435 million by eliminating a second engine design for the Joint Strike Fighter. But the department has proposed eliminating the alternative engine in the past, only to have Congress restore funding.

Obama also wants to terminate the C-17 transport plane program, saving $3 billion a year. But Congress has resisted ending C-17 production in the past. Rep. John P. Murtha (D-Pa.), the powerful head of the House subcommittee on defense appropriations, has pushed for continuing to build the plane, which is assembled in Long Beach.

The abandoned mine lands payments may also prove difficult to cut. The payments stem from a 1977 law that taxes state coal production. Half of the revenue went to a federal fund to clean up abandoned mines around the country, and the other half was supposed to flow back to states that paid into the fund for cleanup and other projects.

Wyoming never received anything close to the amount it paid into the fund.

So in 2006, Congress crafted a plan to pay Wyoming and a few other states and tribes $1.5 billion over 10 years.

Now Obama says the $142 million in the new budget for the payouts is not necessary in states such as Wyoming, where the federal government has declared that all abandoned mines are clean or have cleanup plans in place.

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cparsons@latimes.com

jtankersley@latimes.com

Richard Simon, Noam N. Levey, Julian E. Barnes and Mark Silva in the Washington bureau contributed to this report.