Greatest threat to Obama spending plan? Democrats

McClatchy NewspapersMarch 15, 2009 

WASHINGTON — Government spending on most domestic programs is growing at its fastest pace in nearly 30 years, and a lot of worried Democrats are seeking ways to rewrite and reduce the size of President Barack Obama's budget proposals.

As a result, "you'll see a budget come out of the House that spends considerably less," said Rep. Allen Boyd, D-Fla., a leader of the Blue Dog Democrats, a group of 47 of the party's House of Representatives conservatives and moderates.

If all 47 Blue Dogs joined the House's 178 Republicans, they could deny Democratic leaders a House majority of 218.

The House Budget Committee plans hearings this week on Obama's $3.6 trillion blueprint for fiscal 2010, the 12-month period that begins Oct. 1, and the full House is expected to vote on it sometime in the week of March 30.

The Senate is likely to consider the budget the same week, and Budget Committee Chairman Kent Conrad, D-N.D., is also voicing reservations about the package's size.

"When I look at this budget, I see the debt doubling again, and that gives me great concern," he said. Obama's budget projects that by 2019, debt held by the public will reach $15.3 trillion, roughly double the current level.

Two other factors are also making Democrats nervous: Upcoming Congressional Budget Office projections and an increasingly loud Republican drumbeat about spending.

By Friday, CBO is expected to release a preliminary analysis of Obama's budget plan, as well as its revised economic and deficit projections. The new data will consider the $410 billion fiscal 2009 spending bill signed into law last week and new, more pessimistic economic indicators.

That's likely to mean a deficit prediction even bigger than the $1.7 trillion fiscal 2009 figure Obama has been using. The deficit is expected to reach 12.3 percent of GDP this year.

Obama's budget has deficits dropping to 3 percent of Gross Domestic Product by 2013, and staying at that level through 2019. Conrad said he is "prepared" to get new data from CBO showing future year deficit ratios closer to 4 percent.

Meanwhile, newly energized congressional Republicans are raising a daily chorus of complaints that Democrats are irresponsible spenders.

"They're taking advantage of a crisis in order to do things that had nothing to do with getting us into the crisis in the first place," Senate Republican Leader Mitch McConnell of Kentucky said on ABC's "This Week."

Last week on Capitol Hill, House Republican Leader John Boehner of Ohio told reporters: "When you look at the budget proposal from the White House, I would describe it as an anti-stimulus proposal.

"It raises taxes on all Americans, it increases the size of government, and it borrows too much from our kids and grandkids," he said. "This mountain of debt that's being built this year will crush our ability to get out of this crisis and to get our economy moving again."

There's no doubt that spending is up.

Non-defense discretionary spending, which includes most domestic programs, is up about 16 percent from last year. Under Obama's budget, it would go up another 14 percent next year.

Those are the biggest jumps since similar spending increased 15 percent from 1979 to 1980. If the spending numbers are adjusted for inflation, it's the biggest increase since the mid-1960s.

Administration officials defend the increases as job-creators and resuscitation for programs starved during the Bush administration.

Dissident Democrats won't say yet where they would cut; the Blue Dogs hope to have their own budget blueprint out this week. It's expected to tackle an even thornier problem: Debt

"Democratic witnesses, Republican witnesses, some of the finest economic minds in this country and indeed the world come before this committee day after day, warning us of the danger of a buildup of debt," Conrad said, "and I believe it."

Treasury Secretary Timothy Geithner said at a committee hearing that the administration's program will force tough choices on spending, and will cut deficits in half within five years.

Many Democrats were skeptical. Sen. Evan Bayh, D-Ind., who opposed the fiscal 2009 spending bill, sees little appetite for fiscal sacrifice from the administration. If the government simply continued to spend at 2008 levels, he said, it would have saved about $250 billion in just seven months.

"That's more than one-third of all the money we're being asked to reform the entire health care system in this country," Bayh argued.

Reducing the debt could involve higher taxes, and that makes a lot of Democrats wince.

They've also shown little enthusiasm for two key Obama tax proposals: Creating a health care reform reserve fund by limiting tax breaks for the wealthy, and the cap and trade plan to curb carbon emissions. Critics call the climate plan, aimed at reducing global warming, a tax that will be passed on to consumers.

Boyd called parts of the proposal "troublesome."

Republicans were more blunt. Sen. Judd Gregg, R-N.H., top Budget Committee Republican, calls Obama plans "a massive tax increase."

Budget Committee members discussed their concerns with Obama last week and while he's not planning huge changes, they found Obama sympathetic to some modifications, especially those that will soften the "big spender" tag.

"People just want these problems to be solved, and they want to know that we're not making it worse," said Rep. Jim Cooper, D-Tenn., a Blue Dog leader. "They don't expect perfection."

ON THE WEB:

President Obama's fiscal 2010 budget proposal

Text of fiscal 2009 spending bill

House roll call vote on spending freeze

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McClatchy Newspapers 2009

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