Budget chiefs: Not happy with Obama plan

By Jeanne Sahadi, senior writer


NEW YORK (CNNMoney) -- The top budget chiefs from both political parties criticized President Obama's 2012 budget Monday.

Democrat Kent Conrad and Republican Paul Ryan, the budget chairmen in the Senate and House respectively, share one big beef: The Obama budget remains effectively silent on how to address the long-term drivers of debt -- Social Security, Medicare and Medicaid.

By the end of the decade, those entitlement programs, together with interest owed on the country's debt, could command most of federal tax revenue coming in the door.

Though ideologically different, Conrad and Ryan are both deficit hawks who sat on the president's bipartisan debt commission.

The biggest single measure proposed for deficit reduction in the president's plan is a five-year freeze on non-security discretionary spending, estimated to save $406 billion over 10 years.

"We need a much more robust package of deficit and debt reduction over the medium- and long-term," Conrad said in a statement. "It is not enough to focus primarily on cutting the non-security discretionary part of the budget, which accounts for just 12% of spending this year."

That's why Conrad has been calling for a fiscal summit to be held with the White House and both parties in Congress. He'd like to see an agreement on a plan of attack before Congress votes to increase the country's debt limit, which could happen by May.

Obama in his budget acknowledges long-term fiscal stability can't be achieved simply by cutting discretionary spending. He has also said there is a need for a bipartisan conversation on entitlement reform, but he has yet to back the idea of a formal summit.

Ryan's criticisms of the 2012 budget request were sharper and more wide-ranging. In a conference call with bloggers on Monday, he asserted that the "[the president's budget] is worse than doing nothing." In his view, Obama's budget proposals raise taxes too much and cut spending too little.

Ryan is in the camp that says big spending cuts should be enacted immediately, while Conrad believes the economic recovery should be given a little more breathing room before any major cuts occur.

In that regard, Conrad says the president's budget "gets it about right in the first year. Even as it moves to cut spending, it continues investment in the critical areas of education, energy and infrastructure."

His and Ryan's opinion of the president's proposals matter because they will lead the charge in how Congress crafts its 2012 budget.

On Tuesday, the budget committees will start holding hearings on aspects of the president's budget request, and the chairmen will meet with their respective caucuses to help them decide what shape they believe the 2012 budget should take. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,279.74 13.75 0.08%
Nasdaq 4,579.79 -13.64 -0.30%
S&P 500 2,010.40 -0.96 -0.05%
Treasuries 2.59 -0.04 -1.60%
Data as of 6:35am ET
Company Price Change % Change
Yahoo! Inc 40.93 -1.16 -2.74%
Microsoft Corp 47.52 0.84 1.80%
Bank of America Corp... 16.95 -0.09 -0.53%
Oracle Corp 39.80 -1.75 -4.21%
Facebook Inc 77.91 0.91 1.18%
Data as of Sep 19

Sections

Law enforcement officials say Frank Tamayo was the middleman in a $5.6 million insider trading scheme that involved him eating pieces of paper to cover up the crime. More

Scotland's clear rejection of independence has eased fears that it could suffer the kind of decline seen in Quebec after it failed to break away from Canada. More

It's really good to be Larry Ellison. The Oracle founder is stepping down as CEO, so maybe he'll have more time to enjoy his glamorous life. More

As Occupy Wall Street goes on its debt-abolishing tear, thousands of people across the country are begging them to forgive their loans. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.