Obama's Budget

Washington Post Editorial: The Budget Gimmick's Return - Congress deals a blow to 'honest budgeting.'
Copyright by The Washington Post
Thursday, March 26, 2009; Page A20
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/25/AR2009032503061.html


SENATE BUDGET Committee Chairman Kent Conrad (D-N.D.) and House Budget Committee Chairman John M. Spratt Jr. (D-S.C.) were spooked by a Congressional Budget Office analysis of President Obama's $3.6 trillion proposal that found the government would run a deficit of $9.3 trillion (or $2.3 trillion more than estimated by the White House) over the next decade. They are right to be spooked, and their instincts to try to pare back those looming deficits are correct. But their responses have been to resort to the gimmickry that Mr. Obama sought to get away from. While it makes their budgets look better on paper, it does nothing to improve a dangerous fiscal picture.

Mr. Obama's budget endeavored to be more honest. His was a 10-year financial plan. Like President George W. Bush, Mr. Conrad and Mr. Spratt look ahead only five years, which allows a lot of the red ink to be concealed. Mr. Obama put aside $250 billion for more funding for fiscal stabilization. Mr. Conrad and Mr. Spratt strip that, though they have no reason to believe it won't be needed. Mr. Conrad eliminated the contingency fund for natural disasters, and Mr. Spratt cut it in half. Mr. Obama acknowledged the cost of providing relief from the alternative minimum tax, while Mr. Conrad opts to pretend that the Treasury will actually get this revenue, squeezed from middle-class taxpayers, in the final two years of his budget plan, though he knows Congress won't allow that to happen.

There's no mystery as to the motivation for this dishonesty. Like Mr. Obama, the Democrats in Congress want to spend more on education, energy and other popular programs. Like Mr. Obama, they don't want to level with voters about the need to pay for such programs through increased taxes. According to the CBO, Mr. Obama's budget plan would have the government spending more than 23 percent of gross domestic product throughout the second half of this decade while collecting less than 19 percent in revenue. Rather than fix this problem, Mr. Conrad in his budget proposal closes his eyes and wishes it away.

In the last Congress, Mr. Conrad and Sen. Judd Gregg (N.H.), the ranking Republican member of the budget committee, introduced legislation to convene a Bipartisan Task Force for Responsible Fiscal Action. Northern Virginia Rep. Frank R. Wolf (R) is also an active supporter of such a measure. The 16-member panel would look at the government's revenue and spending with an eye to making recommendations to improve the nation's long-term fiscal balance. Congress would have to vote yes or no on the commission's package. Adopting the proposal would basically be a congressional acknowledgment of failure -- of an inability to make tough political choices. But Mr. Conrad is right to reintroduce the bill in this session; his own budget proposal offers evidence of the need.







Obama scrambles to defend budget
By Andrew Ward and Edward Luce in Washington
Copyright The Financial Times Limited 2009
Published: March 25 2009 19:15 | Last updated: March 25 2009 23:12
http://www.ft.com/cms/s/0/f1a60d0c-196e-11de-9d34-0000779fd2ac.html


Barack Obama on Wednesday scrambled to defend his 2010 federal budget amid Republican claims that the $3,600bn (€2,658bn, £2,463bn) plan would put the US on the path to economic ruin.

The president pressed his case in a meeting with Democratic senators on Capitol Hill a day after using a primetime press conference to tell voters his budget was crucial to America’s long-term economic health.

The White House sought to play down differences between its blueprint and rival plans unveiled by Senate and House Democrats this week that would cut some of the president’s key commitments.

Robert Gibbs, press secretary, said the president was “enormously pleased” with the progress made on Capitol Hill and claimed the congressional plans were “98 per cent the same” as Mr Obama’s.

Harry Reid, Senate majority leader, insisted the final budget would include all the president’s top priorities: investments in education, energy and healthcare, and measures to cut the deficit in half by 2013.

The message of unity came after the Senate budget committee announced plans on Tuesday that would allow Mr Obama’s flagship middle-class tax cuts to run only until 2010, amid concern among centrist Democrats over the soaring deficit.

The House budget committee preserved more of Mr Obama’s spending when it unveiled its plan on Wednesday, but it too removed some significant items.

The White House hoped to finance permanent middle-class tax cuts with revenues from its cap-and-trade scheme to regulate carbon dioxide emissions, but neither the House nor Senate is planning to include those measures in its legislation.

In Tuesday’s press conference, Mr Obama said he remained committed to tackling climate change through cap-and-trade, despite concern in Congress that limits on CO2 emissions could undermine economic recovery by increasing energy costs. But White House officials on Wednesday acknowledged that legislation was likely to move forward outside the budget process.

The House and Senate plans also lacked the $250bn provision included by the White House to fund further potential bank bail-outs.

Both committees backed the creation of a reserve fund to pay for healthcare reform but neither included the firm $634bn commitment proposed by Mr Obama.

“The resolutions may not be identical twins to what the president submitted, but they are certainly brothers that look an awful lot alike,” said Peter Orszag, White House budget director.

The budget debate is shaping up to be the biggest political battle of the year, as Mr Obama tries to use it as a vehicle to set in motion several of his main campaign promises.

Criticism of the plan has mounted since new estimates from the Congressional Budget Office last week projected deficits of $9,300bn over the next 10 years – $2,300bn more than the White House predicted.

“Today, America is at a critical juncture in our history, brought about by a financial crisis and a deep recession that are hurting the American people,” said Paul Ryan, Republican member of the House budget committee. “But instead of focusing on solving the problem, this budget exploits it to justify a huge expansion in government.”

Judd Gregg, the Republican senator who came close to joining Mr Obama’s cabinet as commerce secretary, said the projected deficits made the US look like a “banana republic”. “Countries which have those types of numbers do not survive financially,” he told Fox News.







Washington Post Editorial: Red Ink Red Alert - A congressional report should give the president pause.
Copyright by The Washington Post
Sunday, March 22, 2009; Page A18
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/21/AR2009032101761.html


THE NEW estimates by the Congressional Budget Office showing a federal deficit of 13.1 percent of gross domestic product for the current budget year, which began Oct. 1, are neither surprising nor particularly alarming, though it's larger than the 12.3 percent foreseen by the White House. Both are stunning numbers -- far and away the largest deficit ratio since World War II. But spending rises in recessions and tax revenue falls, and we're in a big recession. It would be counterproductive to balance the budget in this historic downturn. The huge deficit includes $700 billion for a necessary rescue of the financial sector. Nor is it shocking that the CBO forecasts a deficit of 9.6 percent of GDP in fiscal 2010 if Congress enacts President Obama's $3.6 trillion budget plan -- a deficit also much larger than what the president predicted. The difference largely reflects the CBO's economic forecast, which is more up-to-date and, hence, gloomier than the one Mr. Obama relied on.

What is scary, though, is the CBO's depiction of the remaining years of the president's term, and the half-decade after that -- if his budget is enacted. In none of those years would the federal deficit fall below 4.1 percent of GDP -- and it would be stuck at 5.7 percent of GDP in 2019. This is in stark contrast to the president's projection: that his plan would get the deficit down to about 3 percent or so of GDP by that time. It's true, as Peter R. Orszag, director of the Office of Management and Budget, told us, that the CBO's forecasts are subject to large margins of error, especially in the out years. And Mr. Orszag is correct to point out that, even under the CBO's scenario, the deficit as a share of GDP would decline by half under Mr. Obama.

Still, it's less significant to meet that target than to keep the deficits within sustainable bounds, and few experts believe that years of deficits above 4 percent of GDP are consistent with long-term economic vitality. If the CBO's numbers are subject to revision on account of changing circumstances, then so are the administration's; and those were based on very rosy economic assumptions to begin with. Very little of the claimed deficit reduction in the Obama plan comes from policy changes; it results more or less automatically from the assumed end of the recession, as well as by claiming savings in reducing operations in Iraq and Afghanistan from unrealistically high forecasts. Yet both the White House and House Speaker Nancy Pelosi said that the CBO report is no reason to revise the president's ambitious tax and spending blueprint.

Mr. Obama should treat the CBO report as an incentive to fulfill his repeated promises, during and after the campaign, to make hard choices on the budget. Until now he has offered a host of new spending -- on health care, middle-class tax cuts, education and alternative energy -- without calling for much sacrifice from anyone except the top 5 percent of the income scale. Though his emphasis on controlling health-care costs is welcome, it's not a substitute for reforming the entitlement programs that are the drivers of long-term fiscal crisis, Medicare and Social Security. Yet the president has offered no plan for either and no road map even for achieving a plan. Several members of his own party in the Senate have been expressing doubts about his strategy, and the CBO report will lend credibility to their concerns. He should heed them.







Obama's Campaign Army on Road Again - Volunteers Rally Support for Budget Plan
By Peter Slevin and Michael Laris
Copyright by The Washington Post
Sunday, March 22, 2009; Page A01
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/21/AR2009032102249.html?hpid=topnews


EVANSTON, Ill., March 21 -- As she headed into the morning sunshine to talk up President Obama's $3.6 trillion budget proposal, Althea Thomas counted herself a citizen and a partisan picking up where she left off Nov. 4, backing the president she helped elect.

"It's the change we all voted on," said Thomas, one of about 40 volunteers who fanned out from the Democratic Party headquarters here with clipboards, pledge cards and a sense of mission that flowed from their support of Obama when he was a candidate.

The Obama administration and the Democratic National Committee opened a new chapter Saturday in their ambitious project to convert the energy from last year's campaign into a force for legislative reform on health care, climate change, education and taxes.

More than 1,200 groups from Maine to Hawaii spent the day gathering signatures in support of Obama's economic plan, the first step in building what the White House hopes will be a standing political army ready to do battle.

Seeking to create a grass-roots force on a scale never seen before, Obama called the volunteers into action in a video message reminiscent of the 2008 contest. In defense of his budget, under attack from many quarters, he asked his supporters to go "block by block and door by door."

In his Saturday radio address, Obama called his budget "an economic blueprint for our future." He said, "I didn't come here to pass on our problems to the next president or the next generation. I came here to solve them."

The idea of deploying a grass-roots army for legislative purposes is untested. Unlike a political campaign, where ballots are simple, if blunt, instruments that produce winners and losers on a fixed date, a policy campaign is amorphous.

"If successful, it would have revolutionary implications for American politics," said Ross K. Baker, a Rutgers University political science professor who counts himself among skeptics. "You can generate an enormous amount of support for an individual personality. It's much harder to do that for a piece of legislation."

Chicago neighborhood organizer Raul Botello acknowledged the successes of Obama's organization, but he questions the skills and the staying power of volunteers loosely affiliated with the new Organizing for America (OFA), which operates out of the DNC's headquarters.

"It's pretty clear how much harder organizing is to do than straight advocacy," said Botello, a youth organizer for the Albany Park Neighborhood Council. "It takes a long time, being more methodical -- and understanding there will be challenges along the way that are going to impede your attempts."

In the Washington area, David McCracken, a retired teacher, said he was surprised at how readily people signed pledge cards outside a Herndon supermarket. Within 15 minutes, four people had signed, and he was soon on his way to make more copies, humming a line from the '60s musical "Hair."

"This is the dawning of the age of Aquarius; that's about this whole process," McCracken said. "I feel like we're finally getting somewhere."

Not every volunteer had the same success. In Reston, one voter paused to tell public school teacher Pat Hynes that Obama is "way out of his league" and that the canvassing project was "a waste of our time and our attention spans."

Obama is presiding over "the largest con game I have ever seen or heard of in my life," said the man, a retired federal agent who declined to give his name. "There's a difference between campaigning and governing. . . . We're looking for leadership. That's not leadership."

Preparing for the long haul, an OFA executive said volunteers will continue to gather pledges through the Internet, phone banks and shoe leather, and deliver them to members of Congress as a budget vote draws near.

One hope is that local media will expand the message's reach by reporting on the canvassing drives. To spread the word, former campaign manager David Plouffe and OFA Director Mitch Stewart e-mailed 13 million people on the 2008 campaign list and asked for help.

Web links invited readers to call their senators and representatives to voice support for the budget, providing lawmakers' names and phone numbers, and a script to follow. Other tools allowed people to e-mail the appeal to friends and families or post it on Facebook.

Yet the organization remains skeletal, and the Pledge Project does not nearly cover the 435 congressional districts. The organization aims to develop a structure -- including at least one paid staffer in each state -- in time for larger fights over health-care, climate change and education legislation.

"This is all being driven by volunteers. It's an extremely exhilarating process, but also nerve-racking," an Obama veteran said. "We have a very, very scaled-down staff as of right now."

Randall Stagner staged an event Saturday in his home in Raleigh, N.C. For the former campaign volunteer, it started with a call from Organizing for America. He tapped into the 2008 Obama Web site and sent an e-mail in hopes of rustling up some interest.

He received 300 replies.

"I was overwhelmed. There was a lot of pent-up desire to go and do things," said Stagner, 49, a retired Army special operations colonel. He identified 10 people across the state willing to organize a canvass. In all, he expects 30 events.

Stagner has been practicing his own pitch: "You tell people specifically what the president is doing and encourage them to reach out to their senators and representatives and tell them, 'No kidding, we voted for change, and that includes you.' "

Mary Alice Williams had an Obama network to draw upon in Grand Rapids, Mich., when she got Stewart's mass e-mail last weekend. That day, more than 30 former campaign volunteers had marched behind an Obama banner in a local St. Patrick's Day parade.

Volunteers who bonded during the campaign -- turning Kent County Democratic for the first time since 1968 -- have stayed in touch, and some have continued to meet.

"After the election, there was this 'What now?' letdown," said Williams, 66, who took to heart the Obama campaign message that the election was not an end in itself. She liked the idea of building a movement that would do more than elect candidates to office.

"This isn't just that we drank the Kool-Aid and it's one more chance to demonstrate our loyalty," Williams said. "I'm inspired by the civic engagement aspect of it: ordinary people whose only stake in this is to create a better community and a better America.

"As corny as that sounds, that's what most of us really believe."

She is optimistic, even in Michigan, home to the nation's highest unemployment rate -- 11.6 percent.

"Hard times are the best times to organize," Williams said. "When times are good, people are in their bubble."

In Reston, Jayne Byrnes worked a familiar stretch of sidewalk where she registered more than 600 voters during 15 Sundays last year. She calls it her "perch."

"Hi, I know you," she called out to Dhruv Sharma, walking by with his friend Yogesh Sharma. "Today's a national day of celebration and support for the president going forward. . . . How'd you like to sign a pledge?"

Byrnes had met the men in the summer and registered Yogesh Sharma, who had recently become a U.S. citizen. She said that she did not feel as comfortable with the economic pitch as she did when registering voters, but that she is eager to build a local OFA branch.

Both men signed, as did a steady stream of others, who also gave their postal and e-mail addresses. Yogesh Sharma, a software engineer, said, "If I have a mission in front of me and I'm part of a big plan from the president, I'd love to volunteer."

Rep. Jan Schakowsky (D-Ill.) watched volunteers in Evanston head out the door with their clipboards and saw a message in their willingness to act.

"It says the movement continues," said Schakowsky, an early Obama supporter. "The grass-roots organization still exists, and they're still needed to move this agenda."

Laris reported from Virginia. Staff writer Kari Lydersen in Chicago contributed to this report.