Archive for Saturday, February 28, 2009

Obama seeks realistic approach to budget

February 28, 2009


Since the global financial crisis exploded in September, the government’s emphasis has been on devising and enacting massive and expensive measures to stabilize the economy.

This week, Americans are getting some sense of the long-term fiscal cost. It’s not a pretty picture.

As President Barack Obama put it to Congress on Tuesday: “That day of reckoning has come, and the time to take charge of our future is here.”

Like its profligate predecessor, the Obama administration seeks to halve the federal deficit. But even under the most hopeful scenario, that deficit will be bigger after four years than a year ago. And that assumes Obama can persuade lawmakers to pass the broad array of spending and tax programs suggested in his speech.

Still, the president deserves credit on at least three fronts.

First, his initial budget, outlined Thursday, seeks to give honest figures that end the Bush practice of optimizing the numbers by omitting such things as the Iraq war and the annual fix to protect middle-income Americans from the alternative minimum tax.

Second, Obama urges long-term changes in health care and energy that would help the government control the budget areas most likely to explode further out of control.

And third, his agenda is faithful to his platform as a candidate, including his vow to take hold of a fiscal crisis dramatically worsened by the economic slump.

Yes, some of it sounds depressingly familiar. Every recent administration has sought and failed to curb federal spending, at least since Lyndon Johnson turned out the White House lights while trying to keep the 1965 budget under $100 billion.

Both parties have been complicit in that failure, especially since Bill Clinton bequeathed George W. Bush a balanced budget promising significant reductions in the $5.7 trillion national debt.

Today, after the Bush tax cuts, 9/11, the Medicare drug program, Iraq, Katrina and this financial crisis, that debt is nearly $11 trillion and headed up.

To achieve his goals, Obama counts on an economic recovery; cutting costs for Iraq and the current emergency spending; lower health care costs; and selective tax increases, including ending the Bush cuts for upper-income taxpayers and increased levies on corporate overseas earnings.

Republicans predictably assail the spending levels and tax proposals. Some decry raising taxes in a recession, though the increases for those with high incomes wouldn’t kick in until 2011.

And Democrats’ fear of Social Security cuts reportedly delayed an administration plan for a commission to look at entitlement costs.

But Obama and other officials stress that the more immediate problems are Medicare and Medicaid, which explains his focus on curbing health care costs. Indeed, Republican Sen. Mike Enzi on Monday confirmed reports that bipartisan, behind-the-scenes talks are under way.

That came at Monday’s “fiscal responsibly summit,” perhaps the week’s most interesting and meaningful event, where there was considerable talk of a “grand compromise” on taxes, discretionary spending and entitlements, including Social Security. Many outside experts believe that’s the best way to fix things.

The sessions, which brought together an eclectic group of administration officials, Obama’s Democratic allies, his Republican critics and outside experts, didn’t seek to resolve the most difficult issues. But there was strong support for a package solution and substantial agreement that the process was as important as the substance.

Rep. John Spratt of South Carolina, chairman of the House Budget Committee, suggested something like the bipartisan commission and up-and-down votes on their recommendations that former House Majority Leader Dick Armey devised for cutting military bases.

Obama seems determined to be realistic. “Everybody here understands a lot of the tradeoffs involved in health care and that there are no perfect solutions,” he said.

— Carl P. Leubsdorf is the former Washington bureau chief of the Dallas Morning News.


Godot 9 years, 1 month ago

"— Carl P. Leubsdorf is the former Washington bureau chief of the Dallas Morning News."

and is currently serving on Obama's team of profligate propagandists, charged with the gargantuan task of spinning Obama's budget as anything short of a complete disaster.

Richard Heckler 9 years, 1 month ago

President Barack Obama challenged the nation's vested interests to a legislative duel Saturday, saying he will fight to change health care, energy and education in dramatic ways that will upset the status quo....

"The system we have now might work for the powerful and well-connected interests that have run Washington for far too long," Obama said in his weekly radio and video address. "But I don't. I work for the American people."

He said his ambitious budget plan, unveiled Thursday, will help millions of Americans, but only if Congress overcomes resistance from deep-pocket lobbies.

"I know these steps won't sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they're gearing up for a fight," Obama said, using tough-guy language reminiscent of his predecessor, George W. Bush. "My message to them is this: So am I."

Some analysts say Obama's proposals are almost radical. But he said all of them were included in his campaign promises. "It is the change the American people voted for in November," he said.

Nonetheless, he said, well-financed interest groups will fight back furiously.

Insurance companies will dislike having "to bid competitively to continue offering Medicare coverage, but that's how we'll help preserve and protect Medicare and lower health care costs," the president said. "I know that banks and big student lenders won't like the idea that we're ending their huge taxpayer subsidies, but that's how we'll save taxpayers nearly $50 billion and make college more affordable. I know that oil and gas companies won't like us ending nearly $30 billion in tax breaks, but that's how we'll help fund a renewable energy economy."

monkeyhawk 9 years, 1 month ago

I'm so glad to see that the position of President of the United States is once again held in such high esteem after eight years of degradation. Thank you, merrill, for helping to restore it to its original glory.

West_Sider 9 years, 1 month ago

Neal McCluskey, associate director, Center for Educational Freedom:

The higher education elements of President Obama’s spending plan will no doubt be widely applauded because of the public’s perception of spiraling tuition costs. What students and parents need to understand, however, is that tuition costs spiral as a direct result of government’s willingness to subsidize them with taxpayer dollars.

If the budget outline released by the U.S. Department of Education is what ends up getting passed, we can say goodbye forever to what little rationality remains in college pricing. The main constraint on college prices is the ability of students to pay, and while generous federal aid has enabled students to fork out a ton, prices have been somewhat constrained by Pell Grant amounts subject to the annual budget process and private – if federally subsidized – loans. President Obama would get rid of even these mild constraints, ensuring that nothing stands between greedy colleges and every taxpayer dollar they can find.

womanwarrior 9 years, 1 month ago

Hey, Tommy boy, how do you defend the deceitful budget your hero always put forth. Bush was in a dream world, now the world has to wake up and see his nightmare. I guess it does prove one thing, Bush wasn't totally dumb. He could fool all of the Tommyboys all of the time.

womanwarrior 9 years, 1 month ago

Interesting that Tommyboy hasn't responded to why Bush cooked the books on his budgets. Has Rush not told you how to respond yet?

womanwarrior 9 years, 1 month ago

Oh, yeah, it's ok. Bush didn't lie under oath. He made sure he was never under oath, so he could lie, and lie, and lie, and lie.

Commenting has been disabled for this item.