The good news and bad news about the budget

President Obama's $3.55 trillion budget is like a dead deer on the side of the road being picked apart by a flock of vultures.

As we speak, a battalion of Washington lobbyists, Wall Street analysts, think tank experts, congressional staffers, and people who find CSPAN entertaining are picking apart the spending plan, line item by line item. It's a process that's as exciting as it sounds.

At least one budget watchdog thinks Obama is doing the right thing. Robert Greenstein of the Center for Budget and Policy Priorities called it "a bold and and courageous proposal to make progress in restoring fiscal discipline while addressing two central problems of our time - a broken health care system and the threat of catastrophic global warming - and other national needs."

In remarks to the press today, Obama argued that the government needs to approach the budget with the same discipline that citizens bring to their personal finances. At least, that's what people should do. Wall Street reacted coolly to the budget. The indexes were up this afternoon though they dropped at the end of the trading day.

"For too long, our budget has not told the whole truth about how precious tax dollars are spent," Obama said. "Large sums have been left off the books, including the true cost of fighting in Iraq and Afghanistan."

Obama's talk of restoring fiscal discipline sounds "ironic" to the fiscal conservatives at Americans for Tax Reform who believe the spending plan is anything but that.

"It is certainly going to be interesting to see how this will play out," said Sandra Fabry, the group's director of government affairs, in an interview.

Obama's budget estimates that the federal budget deficit at $1.75 trillion, a figure The New York Times referred to as "stunning." He is pledging to cut the deficit in half by the end of his term, a pledge that many experts believe will be hard to keep.

One way Obama plans to close the funding gap is by "targeting $50 billion in savings by cracking down on overpayments of benefits and tax loopholes." For instance, Obama is proposing ending subsidies to student loan lenders such as Sallie Mae (SLM). Shares of Sallie Mae plunged today. He also is proposing ending subsidies to crop producers who earn more than $500,000.

He also is proposing almost $1 trillion in higher taxes on rich Americans such as Wall Street financiers, U.S.-based multinationals and oil companies to pay for permanent tax breaks for lower earners, Bloomberg News notes.

"Obama's 2010 budget proposal, released today, would reinstate the top two Clinton-era tax rates of 36 percent and 39.6 percent in 2011, up from the 33 percent and 35 percent the richest Americans now pay," the news service said. "It would raise taxes on capital gains and dividends to 20 percent for top earners, up from the 15 percent set by former President George W. Bush in 2003. "

There are some ambitious plans, including one to spend $15 billion a year for 10 years on alternative energy. The Washington Post notes that the $250 billion being added to the budget to shore up banks is considered a "placeholder." That is Washington talk for we hope not to have spend that money. But given how things have been going, odds are good that the money will not stay in place for long.

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