Democrats in Congress balk at Obama's debt outlook

WASHINGTON — President Barack Obama's 2011 budget got a cool — at times frosty — reception Tuesday from the lawmakers he needs most, as congressional Democrats offered a host of reasons they're skeptical of the White House plan.

The biggest one: Obama's proposal envisions adding $8.5 trillion to the national debt over the next decade.

"The president's 10-year-outlook is not a path we can take," said Senate Budget Committee Chairman Kent Conrad, D-N.D.

Obama proposed on Monday a $3.83 trillion blueprint for fiscal 2011, a budget that anticipates a record deficit of $1.56 trillion this year and $1.27 trillion next year. On Tuesday, his top lieutenants testified before congressional committees.

Most of the Democrats agreed that more short-term deficit spending is needed to keep the economy from sinking, but a chorus of lawmakers also wanted tougher action to curb future budget deficits.

"I'd like to see a lot more deficit reduction," House of Representatives Budget Committee Chairman John Spratt, D-S.C., told White House Budget Director Peter Orszag.

Sen. Jeff Merkley, D-Ore., was concerned that interest rates may go up more than the administration forecasts. Sen. Sheldon Whitehouse, D-R.I., wanted more attention paid to how curbing health care costs could cut budget deficits.

Conrad, who'll take the lead in navigating the budget through the Senate, was most vocal. While he backed short-term proposals to create jobs and increase the deficit, "I have strong disagreements with the long term" plan, he said.

Orszag, who showed no emotion during his testimony, calmly said that Obama had a long-term plan to reduce the deficits, notably an as-yet un-appointed bipartisan commission to recommend remedies and a renewed push for changes in the nation's health care system.

Orszag was hardly resolute, though, that a commission is a sure bet to bring down deficits, noting that its recommendations would be "subject to considerable uncertainty and will depend on the evolution of the economy."

Any commission recommendations also would have to be approved by Congress, where expected recommendations to cut the future costs of popular programs such as Social Security and Medicare and to raise taxes would face stiff resistance.

There's also no assurance that Congress will agree to a commission that has clout. The Senate failed last week to enact a measure to create such a panel.

Complicating the debt reduction picture is the desire by members of both parties to preserve what they see as important local programs, as well as to give themselves something to boast about in this election year.

"There really isn't anything in this budget which I can take home or talk about in favorable terms with respect to coal when I want to," said Sen. Jay Rockefeller, D-W.Va. "The president talked in his State of the Union about being for research and development ... but the budget doesn't reflect it."

Sen. Patty Murray, D-Wash., criticized Army Corps of Engineers funding. The Howard Hanson dam has been getting weaker and may not be able to control flooding in the Green River Valley, south of Seattle, she said.

Murray grilled Orszag, questioning whether the president's budget has enough money to study dam projects around the country; Orszag calmly said yes.

Democrats also disagreed with one another about broader priorities, showing their traditional left-center split, which will make it hard this year to reach compromises.

Liberals embraced Obama's short-term help for the economy. The president proposed giving small businesses a tax cut for every new job added this year, extending the Making Work Pay tax credit a year, boosting spending on infrastructure projects and providing rebates for consumers who make energy-efficiency improvements to their homes.

Rep. Marcy Kaptur, D-Ohio, said that in her state, "The situation still remains bleak. People want to work."

Thanks to the administration and its allies, however, she said, "I have a hunch this year is going to get better."

Liberals said the administration should do even more to help the economy.

Sen. Bernard Sanders, a Vermont independent, asked Orszag why the administration didn't end the Bush administration's tax cuts for the wealthy immediately. The reductions begin to expire at the end of this year; the administration wants to preserve only those that affect families with adjusted gross incomes of less than $250,000 and individuals who make less than $200,000.

Orszag told Sanders that "this was just the best way forward," and when the senator pressed further, added, "2010 was not the year to reduce the deficit, given the economic downturn."

"I certainly don't agree with that," Sanders said.

The senator also wanted the president's proposed three-year freeze on non-defense discretionary spending to be extended to the Pentagon, an idea that's won support from House liberals.

Orszag said that wouldn't be practical; Sen. Mark Warner, D-Va., agreed.

"Because the nation is at war, we need to have more flexibility," Warner said.

What senators did agree on was that they're uneasy about the long-term debt outlook.

"I don't see the focus as bringing down that long-term debt," Conrad said.


Overview of the president's 2011 budget


Obama's budget sober on jobs, optimistic on growth

Obama budget foresees deficits for a decade

Senate says 'no' to federal debt commission Obama endorsed

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