Obama spending plan
criticized for avoiding deficit commission's major proposals
By Lori Montgomery
Washington Post Staff Writer
Monday,
February 14, 2011; 2:06 AM
President Obama drew fire Sunday from congressional Republicans and
independent budget experts for his reluctance to advance a plan that would
tackle the nation's biggest budget problems in the spending blueprint he will submit to Congress on Monday.
In the first statement of his budget priorities since Republicans regained control of the
House, Obama will avoid politically dangerous recommendations to wipe out
cherished tax breaks and to restrain safety-net programs for the elderly, put
forward last year by his own bipartisan fiscal commission as a strategy for
reining in a soaring national debt.
White House
budget director Jacob J. Lew has told advocates of reform that the White
House thinks any significant plan offered by the president would simply become a
target for partisan attack. Key Democrats, including Senate Budget Committee Chairman Kent
Conrad (N.D.), said they accept that rationale. Republicans argued that
Obama was abdicating a responsibility to chart a path to solvency.
"The country's biggest challenge, domestically speaking, no doubt about it,
is a debt crisis. . . . It looks like the debt is going to continue rising under
this budget," House Budget Committee Chairman Paul Ryan
(R-Wis.) said on "Fox News Sunday." "Presidents are elected to lead, not to
punt. And this president has been punting."
Some who worked on Obama's fiscal panel were also disappointed by his
decision not to endorse any of the major elements of their deficit-reduction
plan, which calls for raising the Social Security retirement age, charging
wealthy seniors more for Medicare and limiting popular tax breaks such as the
mortgage interest deduction. The plan has attracted support from key members of
both parties and is the focus of an effort in the Senate to develop a bipartisan
spending plan.
"I would have preferred to see the administration get out front on addressing
the entitlements and the tax reform that we need to reduce long-run deficits,"
said Alice Rivlin, a commission member who served as budget director in the
Clinton White House. "But they clearly made a tactical decision that this is not
the best way to get to a positive result."
Erskine Bowles, the Democratic chairman of the fiscal commission, said the
White House budget request goes "nowhere near where they will have to go to
resolve our fiscal nightmare."
Lew defended the White House on CNN's "State of the Union" on Sunday, arguing
that the fiscal commission had "a very significant impact" on the president's
budget blueprint. The spending plan incorporates "many, many ideas" developed by
the commission, he said, including proposals to limit awards in medical
malpractice lawsuits, overhaul the corporate tax system and freeze pay for
federal workers.
"There's more on the table, more that's open for the kind of civil discourse
that we need in order to make the tough decisions," Lew said, echoing Obama's
call in his State of the Union address to work "on a bipartisan basis" to
tackle entitlements and inefficiencies in the U.S. tax code.
Obama's budget would trim deficits by $1.1 trillion over the next decade, Lew
said, primarily through budget cuts at the Pentagon and a five-year freeze on
domestic spending that targets many programs long favored by Democrats. For
example, Obama's budget would cut $100 billion from Pell Grants and other
higher-education programs through 2021, scaling back a key Obama initiative.
An administration official, speaking on the condition of anonymity because
the budget has not been released, said the bulk of the savings would come from
ending Pell Grants for summer school students and reducing federal loan
subsidies for graduate students, whose loans would begin accruing interest
before their graduation date.
The official said the savings would be plowed back into Pell Grants, the
primary federal college aid program for the poor. Demand for the grants shot up
during the recession, and the program is facing a shortfall. The savings
proposed by the White House would permit the government to maintain a maximum
award of $5,550 for more than 9 million participating students.
"It's important to note that we're beyond the easy, low-hanging fruit," Lew
said. "We're reducing programs that are important programs that we care about."
Still, $1.1 trillion in savings would barely dent deficits that congressional
budget analysts say could approach $12 trillion through 2021. The deficit is
projected to approach $1.5 trillion this year and will remain above $1 trillion
in 2012 under Obama's new spending plan, Conrad said. In 2015, when Obama had
hoped to get the deficit down to 3 percent of the economy, his new budget plan
projects a deficit of 3.2 percent of gross domestic product, Conrad said.
Conrad, a key architect of the fiscal commission, said the president's budget
is a "first bid" in a complicated budget dance with resurgent Republicans that
could include a charged debate over raising the legal limit on government
borrowing, or even a government shutdown.
"I'm increasingly of the view that it's going to take Congress, Republican
and Democrats, starting in the Senate maybe, demonstrating that there is a way
to reach an agreement and for the president to, in effect, serve as a referee,"
Conrad said. "If we were to demonstrate we really could do something, I think it
would bring the White House to the table - and, hopefully, the House."
But House Republicans, who plan to vote this week on their plan to dramatically cut spending in the current fiscal year, said
they will present their long-term strategy in the budget Ryan will craft in
April.
"It's all coming," House
Speaker John A. Boehner (R-Ohio) said on NBC's "Meet the Press." "You'll see
our budget, where I've got to believe we're going to deal with the entitlement
problem."