Budget watchdogs to Obama, Congress: Be bolder

McClatchy NewspapersJanuary 25, 2011 

WASHINGTON — Budget watchdog organizations gave a thumbs-down Tuesday night to dueling proposals from President Barack Obama and congressional Republicans to freeze or slash some spending, saying they failed to take serious steps to bring down federal budget deficits and the $14 trillion national debt.

Obama proposed in his State of the Union speech that Congress, which controls the purse strings, freeze non-defense discretionary spending for five years. His call follows moves by Republicans in the House of Representatives earlier Tuesday to "slash" such spending by returning it to 2008 levels — before the huge run-up in federal debt from government spending on economic stimulus and rescue measures.

For organizations that advocate balanced budgets and low debt, both proposals address only the smallest part of the federal debt problem. They noted that discretionary spending _ which excludes Social Security, Medicare, Medicaid and defense-related expenditures — accounts for only about 16 percent of the federal budget. In fact, Obama himself said in his speech that the programs he's targeting amount to only about 12 percent.

"You have to do more than that. That's the easiest part of it," complained Robert Bixby, the head of the Concord Coalition, a nonpartisan balanced-budget advocacy group.

The president and House Republicans are opting for political cover, he suggested: Democrats duck tough choices to rein in costly entitlement programs such as Medicare, while Republicans avoid decisions about raising taxes or eliminating popular tax deductions to close the deficit, projected at $1.3 trillion this year.

"You've avoided all the tough choices and look like a fiscal hawk," said Bixby, expressing disappointment that a more serious discussion of debt and deficits isn't emerging. "It's aggressively attacking the wrong problem."

Also disappointed was Maya MacGuineas, who heads the nonpartisan Committee for a Responsible Federal Budget. She wanted the president to support firmly the December recommendations of his bipartisan National Commission on Fiscal Responsibility and Reform.

That panel, known for proposing the Bowles-Simpson plan — for its co-chairmen, Erskine Bowles and Alan Simpson — issued a surprisingly thorough set of tough choices for the president and lawmakers to make to tame the soaring deficits and debt.

"I think he could use the commission report to rise above the questions we have about cuts to discretionary spending. The much bigger part is the rest of the budget," said MacGuineas, who added that the purpose of the panel was to make it easier for politicians to do the right thing. "The purpose of the commission is to give the politicians cover. ... It would give him the political cover he's going to need."

Obama speaks of the need to address the nation's long-term fiscal challenges, as do Republicans — both sides leaving themselves room to negotiate later — but to the ire of watchdog groups, both sides appear unwilling to lead now with concrete proposals on the majority of federal spending.

"The magnitude of the problem is so great that spending cuts or revenue increases alone will not be enough. This year, the president and Congress must work together to agree upon a comprehensive, bipartisan plan to be implemented when the economy recovers," Pete Peterson, the chairman of the Peter G. Peterson Foundation, said in a statement.

Senate Majority Leader Harry Reid, D-Nev., said Obama's proposed freeze was "something that's in the ballpark of reality," dismissing the Republican proposals as "not really in the framework of anything being realistic."

Not surprisingly, Senate Minority Leader Mitch McConnell, R-Ky., was similarly dismissive of Obama's proposal, which is a partial rehash from last year's State of the Union.

"I would remind you in the speech last year there was a recommendation for a three-year freeze. And the problem is that it freezes in place an extraordinary increase in spending that's occurred over the last two years," McConnell said.

(David Lightman contributed to this article.)


State of the Union history

Republican plan to reduce congressional budgets

Rep. Ryan's road map


Will Obama's message Tuesday win back independents?

In this year's State of Union, seating could blur party lines

New Congress likely full of brimstone, talk, little change

McClatchy's probe into roots of financial crisis, a Pulitzer finalist

To ask a question about this story or any economic question, go to McClatchy's economy Q&A

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