February 13, 2011; Source:  Associated Press |  OMB Director Jacob Lew summarized President Obama’s plan for the federal budget in 2012 as including “$1.1 trillion in deficit reduction over the next decade by freezing many domestic programs for five years.”  Lew said that it would be impossible to “do this painlessly.”





No kidding.  The details should concern all nonprofits, because within the discretionary spending total will be some subjects that get more funding, such as education and public works, and others that will get less.   One of the parts of the budget proposal is the revival of Obama’s plan from last year to limit itemized deductions for the wealthy, including limiting deductions for charitable gifts and for mortgage interest.  This will revive the debate that raged in 2009 when the administration looked at limiting itemized deductions for the super-wealthy as one component of paying the bill for national health care reform.  

The budget will also hack s$300 million from the Community Development Block Grant program, the $4.4-billion federal program that helps seniors, low-income residents and rundown neighborhoods. The proposed budget would also cut close to a half billion from the Community Services Block Grants, and cut as much as $2.5 billion from a program to help low-income people pay their heating bills.  The full FY2012 proposals, along with FY2011 rescissions, will be announced today. These cuts hardly constitute a valentine to the hard-working nonprofit sector.—Rick Cohen