Tuesday’s Headlines: Budget Hearings; ‘Don’t Ask, Don’t Tell’ Repeal Underway

One day after the Obama administration released its $3.8 trillion budget plan, Treasury Secretary Timothy Geithner and the president’s budget director, Peter Orszag, are set to explain it Tuesday before congressional committees.

Also on Capitol Hill, Defense Secretary Robert Gates and Joint Chiefs of Staff Chairman Adm. Mike Mullen are to discuss lifting the military’s 16-year ban on gays openly serving in the armed forces.

President Obama’s proposed budget is fueling debate among lawmakers over the need to create job growth while also cutting the projected deficit, nearly $1.6 trillion. The president’s budget would impose nearly $1 trillion in higher taxes on the wealthy by not renewing tax cuts enacted under former President George W. Bush. The proposal would extend Bush-era tax cuts for families and individuals making less.

One of the president’s initiatives, a proposed $5,000-per-job tax credit for companies that hire more workers, could come up for a vote in the Senate as early as the end of the week if senators can work out the details, reports the Associated Press.

Politico breaks down the winners and losers under President Obama’s budget plan, saying “that Obama is far more concerned about the nation’s unemployment rate than he is about the federal deficit — at least in the short term.”

The NewsHour’s Paul Solman tackles the question: What effect will a freeze on discretionary spending have on the U.S. economy? The answer: It depends on good of a high-wire artist the president is.

On a hopeful note for the economy, the Wall Street Journal reports that a survey shows that banks have stopped making it hard for consumers and businesses to borrow, and manufacturing climbed to its highest levels in five years.

Also sure to create heated debate on the Hill: The president’s top defense officials will tell the Senate on Tuesday that the military will no longer aggressively pursue disciplinary action against gay service members whose orientation is revealed against their will by third parties.

In testimony before the Senate Armed Services Committee, Gates and Mullen also are expected to announce the creation of a group to assess how to carry out a full repeal of the “don’t ask, don’t tell” policy. Their visit comes on the heels of President Obama’s State of the Union address last week in which he pledged to “work with Congress” to repeal the ban.

Politics Daily rounds up reaction from various senators.

For his part President Obama got out of town Tuesday, as he’s set to pitch his economic plan in Nashua, N.H., for an event that will feature a “town hall” question and answer session. President Obama will also unveil a new program that will take $30 billion from the Troubled Asset Relief Program and transfer it to a fund that is targeted specifically at smaller banks.

WBUR gets reaction from Nashua residents.

Not to be upstaged, Punxatawny Phil made his annual appearance Tuesday. The famous groundhog awoke, and, alas, saw his shadow: Six more weeks of winter.