The new GOP congress and the president are lining up for what promises to be a battle royale over the FY 2011 budget. The president has put back unveiling his budget for at least a week, while GOP lawmakers like Rand Paul want to bring budget cuts to the forefront in novel ways.
Also, the budget debate will probably run smack into the deadline to raise the debt ceiling. Given all of this, even Obama realizes he is going to have to give on the issue, although there appear to be some red lines that Obama believes can't be crossed:
That means Mr. Obama will be releasing his budget plan for the fiscal year that begins Oct. 1, 2011 just as he prepares for difficult negotiations with House Republicans over spending for the current budget year.
The spending blueprint for fiscal 2012 could be momentous. Mr. Obama has promised spending cuts that will embody the "shared sacrifice" he says is needed to tame the $1.3 trillion budget deficit. It is also expected to launch broader debates about reshaping the U.S. tax code to make it simpler and to bring in more revenue. It also is likely to refer to changes the administration says need to be made to Social Security to secure the system's long-term solvency as the nation's population grows older.
Regardless of the president's proposals, the Republicans who will be controlling the House next year have vowed to make deeper cuts. Incoming House Speaker John Boehner (R., Ohio) has pledged to reduce domestic federal spending to the levels of 2008, before the financial crisis and the recession. White House officials have said cuts of that magnitude would imperil the economic recovery.
We'll see how wedded Obama is to the notion of cutting back the budget to 2008 levels as well as the GOP's commitment to getting the budget under control.