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President Obama's 2012 Budget

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With the worst recession in generations behind us, President Obama has put forward a plan to rebuild our economy and win the future by out-innovating, out-educating, and out-building the rest of the world. But we cannot win the future if we pass a mountain of debt on to our children and our grandchildren.

That's why the President's 2012 federal budget takes responsibility for our deficits and puts the nation on a path to live within its means. It's a responsible approach that cuts wasteful spending and, as so many American families must do every day, it makes tough choices on things we can't afford. This plan institutes a five-year spending freeze that will reduce domestic spending to its lowest level since the Eisenhower administration.

Over the next decade, it reduces the deficit by more than $1 trillion -- two-thirds of it from spending cuts. Through this budget, the President meets his pledge to cut the deficit he inherited in half by the end of his first term.

In addition to responsible spending cuts, the President¹s budget makes targeted investments in America's incubators of growth: education, innovation, clean energy, and infrastructure. It reforms how Washington does business, putting more federal funding up for competition and reforming government to make it smarter, more effective and better prepared to meet the needs of the 21st century.

The President's 2012 federal budget restores responsibility to government and spending, while still working to help spur private-sector job creation and grow the economy for the long run. Please read below or visit for more information.


“When a child walks into a classroom, it should be a place of high expectations and high performance.”
– President Barack Obama
  State of the Union address
  January 25, 2011

President Obama is committed to improving America’s schools and providing the opportunity of higher education to any student who wants it. The President’s plan:

  • Continues the maximum Pell Grant award that will help 9 million students afford college.
  • Reforms funding for K-12 schools by raising standards, encouraging innovative teaching techniques, and rewarding success.
  • Expands the Race to the Top concept to encourage competition for success in early-childhood education, school districts, university funding, and education-job training.
  • Trains 100,000 new science, technology, engineering, and math teachers.


“We’re the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook. In America, innovation doesn’t just change our lives. It is how we make our living.”
– President Barack Obama
  State of the Union address
  January 25, 2011

Innovation has always been the heartbeat of American industry — and President Obama is committed to strengthening that trend. The President’s plan:

  • Invests $148 billion in research and development and biomedical research at the National Institutes of Health — and more than doubles energy efficiency research and development.
  • Works to put one million electric cars on the road by 2015, double the current share of clean-energy electricity by 2035, and reduce the costs to power buildings. To pay for this, the President is eliminating 12 tax breaks to oil, gas, and coal companies.
  • Simplifies, expands, and makes permanent the research and development tax credit.
  • Creates 20 new Economic Growth Zones, which provide tax incentives to economically-depressed areas to help jump-start investment and employment.


“America is the nation that built the transcontinental railroad, brought electricity to rural communities, constructed the Interstate Highway System. The jobs created by these projects didn’t just come from laying down track or pavement. They came from businesses that opened near a town’s new train station or the new off-ramp.”
– President Barack Obama
  State of the Union address
  January 25, 2011

President Obama’s plan details his commitment to helping rebuild America — to improving roads, bridges, trains, buildings, high-speech Internet access, and the crucial types of infrastructure that enable economic growth. His plan:

  • Creates jobs in the short term with a $50 billion investment to establish a National Infrastructure Bank to support important building projects and bring high-speed rail to 80 percent of Americans in the next 25 years.
  • Builds a wireless broadband network that will bring high-speed Internet to 98 percent of Americans, and establishes a network for public safety.


“I’m willing to eliminate whatever we can honestly afford to do without. But let’s make sure that we’re not doing it on the backs of our most vulnerable citizens. And let’s make sure that what we’re cutting is really excess weight. Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine.”
– President Barack Obama
  State of the Union address
  January 25, 2011

Having inherited a massive budget deficit, President Obama is dedicated to finally balancing the government’s checkbook. The President’s budget:

  • Freezes non-security discretionary spending for five years to reduce the deficit by over $400 billion and bring spending to its lowest level since President Eisenhower.
  • Cuts government infrastructure programs with an uncertain record of success and those programs the government simply can no longer afford.
  • Reduces Pentagon spending over the next five years, bringing defense spending down to zero real growth — including spending related to Iraq and Afghanistan.
  • Patches the Alternative Minimum Tax for three years so that middle-class families aren’t hit with a crippling tax increase. This is paid for by limiting deductions for high-income earners.
  • Works with Congress to simplify the tax system, eliminate special-interest loopholes, level the playing field, and reduce corporate taxes for the first time in 25 years — all without adding to the deficit.


“Government has a responsibility to spend the peoples’ money wisely, and to serve the people effectively. I will work every single day that I am President to live up to that responsibility, and to transform our government so that is held to a higher standard of performance on behalf of the American people.”
– President Barack Obama
  Weekly Address
  April 25, 2009

Government reform is an effort to make sure that all Americans are well served, and that their tax dollars are never wasted. That’s why President Obama’s budget:

  • Cuts nearly $2 billion in administrative overhead costs such as printing, travel, and supplies.
  • Uses the Race to the Top model and creates competitive grant programs in early childhood education and college, transportation, workforce training, and energy efficiency.
  • Begins to reorganize government to be more efficient and works to ensure that America is more competitive.

You can learn more about the budget by visiting