Obama lays out spending cuts in new budget

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WASHINGTON (CNN) -- After promising the American people that his team has already found $2 trillion in budget savings by scouring the federal budget, President Barack Obama is planning to lay out some of the potential spending cuts in detail when he unveils his first blueprint on Thursday, according to senior administration officials familiar with the budget plan.

"My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs," Obama said Tuesday in a speech to a joint session of Congress. "... We have already identified $2 trillion in savings over the next decade."

A list of some of the proposed spending cuts obtained by CNN shows that the programs on the chopping block include outdated farm subsidy programs, pricey Pentagon weapons programs and the "carried-interest" loophole on Wall Street.

Each program, however, has political patrons on Capitol Hill who will fight to save the budget items, setting the stage for major political battles as the details of the budget are debated by lawmakers in the months ahead.

One high-profile proposal involves closing the loophole that has allowed some Wall Street investment managers to pay lower tax rates than their low-paid assistants. Wall Street lobbyists have fought such changes in the past and won, but the current political environment is so sour on financial executives that the proposal could garner more support.

"Under current law, investment managers have been exploiting a loophole in our tax code to pay 15% on their earned income, the same rate that a middle-class family making $80,000 a year pays. The budget calls for closing the so-called 'carried-interest' loophole," says the administration's list, without being specific about how much revenue that would bring to the federal government.

On agriculture, the Obama administration is aiming to save $9.8 billion over 10 years by phasing out direct payments to farmers with sales revenue of $500,000 or more per year. The list of spending cuts says "about 25% of direct payments go to farmers with farm sales (revenue) of greater than $500,000."

The administration is also targeting federal payments to cotton producers that cover the storage of their cotton while it is under a "marketing loan," according to the list, which could lead to savings of $570 million over 10 years.

"Marketing loans provide eligible producers with interim financing on their production, allowing producers to store their crop, which is pledged as collateral, instead of selling it immediately after harvest," said the list provided by administration officials.

On education, the administration is considering eliminating the Federal Mentoring Program created by the previous Bush administration to save nearly $50 million.

"Mentoring activities are supported by more than 100 youth programs across 13 agencies," the administration's list says. "The Obama administration is committed to strengthening and improving federal mentoring supports, but will likely eliminate funding for this ineffective initiative."

On defense, the administration's list suggests it will target expensive weapons systems but does not specify which programs would be cut or how much money would be saved. White House officials said they are letting Defense Secretary Robert Gates take the lead on specific announcements Thursday.

The list did say the Pentagon's new weapons programs are "among the largest, most expensive and technically difficult that the department has ever tried to develop. Consequently, they carry a high risk of performance failure, cost increases and schedule delays."