President Obama sent a $3.73 trillion budget to Congress this morning, a Valentine’s Day president both sides of the political spectrum seem to find more sour than sweet. Predictably, Republicans on The Hill already are saying the Obama budget doesn’t go far enough in terms of spending cuts and puts unfair taxes on high income earners. Some Democrats also responded predictably, saying some spending cuts are too severe.

According to the president’s proposal, in fiscal year 2012 projected revenue will be $2.627 trillion. Projected spending will be $3.729 trillion. That means there’s a projected budget deficit of $1.101 trillion. The budget is widely seen to have two main goals:  To cut the deficit and “invest” in the economy to stimulate growth and to improve U.S. competitiveness. Now, if these two goals appear to you to be in conflict, then you’re not alone. How do you propose cutting while also spending more money on big government projects? I guess that’s Washington math for you.

Here’s the money quote from the president that reveals those conflicting goals:

“My budget makes investments that can help America win this competition and transform our economy, and it does so fully aware of the very difficult fiscal situation we face.”

That sounds like a classic case of having your cake and eating it too. But whatever the political spin is, investors need to read between the lines and find out whether cuts will take away from their investment opportunities and whether prospective spending plans gie their portfolio a boost.

On the cuts side of the equation, the president’s budget proposal calls for the reduction and/or closure of 200 federal programs. The budget also proposes cuts to low income assistance and grant programs. But perhaps the biggest cut in spending is a five-year non-security discretionary-spending freeze, and a two-year freeze of federal government employees’ salaries. The president also proposed aggressive cuts in the Pentagon’s budget. He wants to cut defense spending by $78 billion over the next five years.

The takeaway: Some lean times for defense firms like Raytheon (NYSE: RTN) and Lockheed Martin (NYSE: LMT), and possible impact on consumer spending. After all, government jobs are some of the best paying opportunities in many communities and one of the few sectors that has seen significant job growth. Messing with that will surely mess with the consumer side of the equation, even if the intent is to rein in government spending.

The budget also includes the return of higher tax rates on those making over $250,000 per year. And some proponents of “supply side” economics would content that will also weigh on the consumer side as well as the business spending side.

On the spending side of the equation, the president made good on his State of the Union call for more dollars funneled into technology and research. The budget proposes making the research and development tax credit permanent, new loan authority for the construction of new nuclear-energy power plants, and loan guarantees for various renewable-energy projects. The budget also includes billions in spending for a variety of infrastructure programs.

So the takeaway is that construction-related firms like Caterpillar (NYSE: CAT) may benefit from roadbuilding and similar projects, nuclear power players like General Electric (NYSE: GE) could see a bounce and that select green energy stocks may get a leg up.

The president’s proposal is likely to be drastically altered by the Republican House and by the Democrat Senate. That’s probably why the initial reaction the budget on Wall Street has been one of relative indifference. There was also nothing really too surprising in the budget, and that lack of surprise is actually music to investors’ ears.

So, when it comes to the budget, it’s appears to be a case of “let’s wait and see” for investors. But these areas named here may very well be the sectors of the economy where we see the most impact when the budget is at last finalized by Congress.

At the time of publication, Jim Woods held no positions in any of the stocks mentioned in this article.