Looking at the summary I'm starting to wonder if things might not be so bad...
It really does seem like they are discouraging the continued current funding options, and frankly I don't think defunding NASA to any real extent is at all doable politically right now. Just watch the fireworks in Congress if the contracts for boosters get cancelled. It looks to me like they are also pretty heavily indicating that the ISS needs an extension past 2015 (duh, if you ask me), but that the current program can't sustain that with the $3 billion budget increase they are using as the only option given. I'll admit that none of their options are keeping lunar landings anytime near 2020, but the options they seem to be playing up don't do anything to make development harder later...
What really stands out is the discussion of "Ares V Lite". It seems to amount to DIRECT with less emphasis on the Shuttle derived side of things. Frankly it looks like a great political option that doesn't even do too much damage to the program; the station is preserved past 2015 (2015 never was popular politically, with the 15 years construction, five of operation angle), Orion flys (no end of human spaceflight), and quite possibly gets back the cancelled capabilities with the heavier booster, they can keep talking about the Moon being a goal (no cuts to the "vision", but still a chance to talk about fiscal responsibility), there isn't the fallout from switching platforms completely (and putting people out of work in the process) and we even get a more or less HLLV out of the deal (probably sooner than with Ares V). There really doesn't seem to be much of a political downside.
I don't see the problem with DIRECT/"Ares V Lite" as an HLLV, it seems to only bring Ares down to the same range as the Saturn V (which seems quite sufficient for the Moon and Mars), in any case my personal feeling on Ares I is that it's in whatever it does to get Ares V built. As far the program goes, it hurts efficiency for orbital ops in a big way, but puts NASA in a position that Altair/EDS can start right away if/when funding appears. All in all, I'm breathing a (little) sigh of relief. We won't be getting to the moon for the 50th anniversary of Apollo 11, but we are still correcting the worst mistakes of the 70s. It seems like the best we're likely to get, and probably has a better outcome than either the Apollo shutdown or the shuttle development budget cuts.