New Budget Calls for Deep Spending Cuts

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President Barack Obama sent Congress a $3.7 trillion budget plan Monday that includes major cuts affecting every American.

Obama pledged the budget would cut more than $1 trillion from the federal deficit over the next decade.

Two-thirds of the president's proposed savings come from spending cuts, including $78 billion in cuts to the Department of Defense, $100 million slashed from federal Pell grants that help students pay for college, $2.5 billion cut from home heating assistance for the poor, and $300 million in grants that aid community development.

"If we're going to walk the walk when it comes to fiscal discipline, these types of cuts will be necessary," Obama explained.

The new budget boasts significantly trimming the deficit over the next 10 years, but is still projected to keep the U.S. in the red by $8 billion more in 2012.

CBN News spoke with Phil Kerpin of the group Americans for Prosperity about how President Obama's proposed budget will affect taxpayers, and whether it's a responsible way to reduce the deficit.  Click play for his comments following Jennifer Wishon's report.

The remaining one-third of the president's plan comes from tax hikes.

The Bush tax cuts would expire for Americans earning more than $200,000 and couples earning $250,000. The plan would also limit tax deductions for mortgage interest and charitable contributions, and increase taxes on oil, gas, and coal producers.

Although he expects the budget to slash the federal deficit, the plan also increases spending in some areas -- creating more than $7 trillion in new debt.

"Even as we cut out things that we can afford to do without, we have a responsibility to invest in areas that will have the biggest impact on our future," Obama said. "And that's especially true when it comes to education."

Republican lawmakers aren't happy with the plan.

"If he's talking about coming and having new spending, so-called investments, that is not where we are going," Rep. Paul Ryan, R-Wisc. said.

The president punted on addressing two major budget busters -- Social Security and Medicare.

"We're broke," House Speaker John Boehner, R-Ohio, said in response to the proposal. "It's time to cut spending... the president wants to freeze domestic discretionary spending at existing levels."

"This is after all of the money that's been spent over the last two years," he continued. "Locking in that level of spending is way too much."

Members of President Obama's cabinet will be on Capitol Hill defending his budget this week.

Meanwhile, Congress has to agree before March 4 on a continuing resolution to keep government funding running through the end of the year.

If members can't agree on a spending plan, there is the potential for a government shut down like the one seen in 1995.

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Jennifer Wishon

Jennifer Wishon

CBN News White House Correspondent

Jennifer Wishon is the White House correspondent for CBN News based in the network’s Washington, D.C. Bureau.  Before taking over the White House beat, Jennifer covered Capitol Hill and other national news, from the economy to the 2010 oil spill in the Gulf of Mexico.  Follow Jennifer on Twitter @JenniferWishon and "like" her at Facebook.com/JennWishon.