March 21, 2009
WASHINGTON — The Congressional Budget Office placed a new hurdle in front of President Obama’s agenda on Friday, calculating that the White House’s tax and spending plans would create deficits totaling $2.3 trillion more than the president’s budget projected for the next decade.
The difference largely reflects the administration’s more optimistic forecasts of economic growth through 2019.
The budget office figures, which will guide Congress as it takes up Mr. Obama’s proposals in earnest next week, were worse than Democratic leaders expected and further complicated their job of achieving the president’s priorities on health care, energy policy and much more.
Moderate Democrats from competitive districts and states have already expressed nervousness about some of Mr. Obama’s plans, especially as Republicans have grown increasingly emboldened to stay on the attack.
Senator Judd Gregg of New Hampshire, the senior Republican on the Senate Budget Committee, said the new report “confirms that under the president’s plan, our debt will increase to shocking levels that are simply unsustainable and will devastate future economic opportunities for our children and grandchildren.”
The president, anticipating the report, referred to “the massive deficit we inherited and the cost of this financial crisis” in a speech to state legislators meeting in the capital. While he restated his vow to cut the deficit in half by the end of his term, Mr. Obama gave no ground on trimming his domestic agenda.
“What we will not cut are investments that will lead to real growth and real prosperity,” he said, citing his budget’s spending commitments for health care, energy alternatives to foreign oil, and education.
While long-term budget projections are notoriously unreliable, they help set the terms of the debate and provide political ammunition to both parties. In this case, the Congressional figures could make moderate Republicans and fiscally conservative Democrats less open to supporting Mr. Obama’s agenda because of concern about the nation’s long-term fiscal health.
Mr. Obama’s budget predicted total deficits for the next decade of nearly $7 trillion. The Congressional Budget Office analysis of his plan put the figure at nearly $9.3 trillion, or a third higher.
The House and Senate Budget Committees are planning to draft their versions of a budget next week, and both chambers expect to vote the following week before leaving for an Easter and Passover recess.
Congress’s budget resolutions do not require the president’s signature and do not have the force of law. But the blueprint that the House and Senate ultimately agree to will go far in determining the odds for success of Mr. Obama’s domestic program for this year and beyond.
To the extent that the nonpartisan budget office report made the administration’s sales job harder, it added to the determination of some Congressional Democrats — with White House coaxing — to use the budget process to authorize a controversial parliamentary maneuver to help the White House win passage of one of the president’s top priorities, health care legislation.
The maneuver, known as “reconciliation,” would allow the Senate to adopt a health care bill this year with 51 votes instead of the 60 that would normally be necessary. It takes 60 votes to shut off debate, but under reconciliation rules the Republicans would be unable to use the threat of filibuster to block the legislation.
That procedural question, as much as any issue of huge dollar figures and weighty policy proposals, is one that divides both chambers and parties as the budget debate gets under way. Senate Republicans, unwilling to lose their best leverage to shape or stop a health care bill, have served notice that they would consider the reconciliation tactic a breach of Mr. Obama’s promised spirit of bipartisanship.
Partly to avoid alienating potential Republican allies in the Senate, some influential Senate Democrats oppose using the reconciliation maneuver. Those opponents include the chairmen of the Budget and Finance Committees, Senators Kent Conrad of North Dakota and Max Baucus of Montana.
The tactic is “not the best way to write major substantive legislation” that should have bipartisan buy-in, Mr. Conrad said in an interview.
But House Democratic leaders argue that presidents from Ronald Reagan to George W. Bush have employed the reconciliation process to achieve their major campaign promises; Mr. Obama, they said, should be no different.
Democrats in both chambers say the House is likely to approve a budget resolution that authorizes the tactic for health care legislation, the Senate most likely will not, and the issue will have to be settled in negotiations between the chambers — with the result hinging on how hard the president wants to lean on Democratic senators to go along.
After initial soundings, Congressional Democrats and the White House decided not to seek the tactic for Mr. Obama’s equally controversial energy and climate change proposals because of opposition from within the party, especially among Democrats from manufacturing and coal-producing states.
Mr. Conrad said the budget office’s grim analysis merely “confirms what I’ve been saying for days, that we’re going to have to make adjustments in the president’s proposal,” especially to restrain spending.
“No one ever had an expectation that they would just take our budget, Xerox it and vote on it,” said Peter R. Orszag, director of the White House Office of Management and Budget.
The economy’s expected recovery after this year is projected to help bring in enough additional tax revenue to reduce future annual deficits. Mr. Obama’s budget shows a $533 billion deficit by fiscal 2013, the last of his term, which would mean more than a two-thirds reduction—more than meeting his pledge to shave the annual deficits in half.
Mr. Conrad predicted that Congress’s budget would project a similar two-thirds cut. The budget office analysis of Mr. Obama’s budget put the deficit in 2013 at $672 billion. The annual deficits for much of the next decade would range from more than 4 percent to more than 5 percent of the gross domestic product, a level that Mr. Orszag acknowledged would be unsustainable.
The difference largely reflects the administration’s more optimistic forecasts of economic growth through 2019.
The budget office figures, which will guide Congress as it takes up Mr. Obama’s proposals in earnest next week, were worse than Democratic leaders expected and further complicated their job of achieving the president’s priorities on health care, energy policy and much more.
Moderate Democrats from competitive districts and states have already expressed nervousness about some of Mr. Obama’s plans, especially as Republicans have grown increasingly emboldened to stay on the attack.
Senator Judd Gregg of New Hampshire, the senior Republican on the Senate Budget Committee, said the new report “confirms that under the president’s plan, our debt will increase to shocking levels that are simply unsustainable and will devastate future economic opportunities for our children and grandchildren.”
The president, anticipating the report, referred to “the massive deficit we inherited and the cost of this financial crisis” in a speech to state legislators meeting in the capital. While he restated his vow to cut the deficit in half by the end of his term, Mr. Obama gave no ground on trimming his domestic agenda.
“What we will not cut are investments that will lead to real growth and real prosperity,” he said, citing his budget’s spending commitments for health care, energy alternatives to foreign oil, and education.
While long-term budget projections are notoriously unreliable, they help set the terms of the debate and provide political ammunition to both parties. In this case, the Congressional figures could make moderate Republicans and fiscally conservative Democrats less open to supporting Mr. Obama’s agenda because of concern about the nation’s long-term fiscal health.
Mr. Obama’s budget predicted total deficits for the next decade of nearly $7 trillion. The Congressional Budget Office analysis of his plan put the figure at nearly $9.3 trillion, or a third higher.
The House and Senate Budget Committees are planning to draft their versions of a budget next week, and both chambers expect to vote the following week before leaving for an Easter and Passover recess.
Congress’s budget resolutions do not require the president’s signature and do not have the force of law. But the blueprint that the House and Senate ultimately agree to will go far in determining the odds for success of Mr. Obama’s domestic program for this year and beyond.
To the extent that the nonpartisan budget office report made the administration’s sales job harder, it added to the determination of some Congressional Democrats — with White House coaxing — to use the budget process to authorize a controversial parliamentary maneuver to help the White House win passage of one of the president’s top priorities, health care legislation.
The maneuver, known as “reconciliation,” would allow the Senate to adopt a health care bill this year with 51 votes instead of the 60 that would normally be necessary. It takes 60 votes to shut off debate, but under reconciliation rules the Republicans would be unable to use the threat of filibuster to block the legislation.
That procedural question, as much as any issue of huge dollar figures and weighty policy proposals, is one that divides both chambers and parties as the budget debate gets under way. Senate Republicans, unwilling to lose their best leverage to shape or stop a health care bill, have served notice that they would consider the reconciliation tactic a breach of Mr. Obama’s promised spirit of bipartisanship.
Partly to avoid alienating potential Republican allies in the Senate, some influential Senate Democrats oppose using the reconciliation maneuver. Those opponents include the chairmen of the Budget and Finance Committees, Senators Kent Conrad of North Dakota and Max Baucus of Montana.
The tactic is “not the best way to write major substantive legislation” that should have bipartisan buy-in, Mr. Conrad said in an interview.
But House Democratic leaders argue that presidents from Ronald Reagan to George W. Bush have employed the reconciliation process to achieve their major campaign promises; Mr. Obama, they said, should be no different.
Democrats in both chambers say the House is likely to approve a budget resolution that authorizes the tactic for health care legislation, the Senate most likely will not, and the issue will have to be settled in negotiations between the chambers — with the result hinging on how hard the president wants to lean on Democratic senators to go along.
After initial soundings, Congressional Democrats and the White House decided not to seek the tactic for Mr. Obama’s equally controversial energy and climate change proposals because of opposition from within the party, especially among Democrats from manufacturing and coal-producing states.
Mr. Conrad said the budget office’s grim analysis merely “confirms what I’ve been saying for days, that we’re going to have to make adjustments in the president’s proposal,” especially to restrain spending.
“No one ever had an expectation that they would just take our budget, Xerox it and vote on it,” said Peter R. Orszag, director of the White House Office of Management and Budget.
The economy’s expected recovery after this year is projected to help bring in enough additional tax revenue to reduce future annual deficits. Mr. Obama’s budget shows a $533 billion deficit by fiscal 2013, the last of his term, which would mean more than a two-thirds reduction—more than meeting his pledge to shave the annual deficits in half.
Mr. Conrad predicted that Congress’s budget would project a similar two-thirds cut. The budget office analysis of Mr. Obama’s budget put the deficit in 2013 at $672 billion. The annual deficits for much of the next decade would range from more than 4 percent to more than 5 percent of the gross domestic product, a level that Mr. Orszag acknowledged would be unsustainable.
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