Obama To Submit 'Sober' Budget To Congress

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By signing into law the $787 billion economic stimulus and rolling out a plan to keep people from losing their homes, President Obama last week kept the focus on what the federal government will spend to bring about economic recovery. In the coming week, though, the president pivots: His new focus is austerity and restraint. In his weekend address, Obama said he's convening a fiscal summit Monday to discuss how the trillion dollar deficit he's inherited can be cut.

"On Tuesday, I will speak to the nation about our urgent national priorities. And on Thursday, I'll release a budget that's sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don't, and restoring fiscal discipline," Obama said.

Administration officials say Obama plans to slash the deficit in half in part by letting tax cuts expire for those making more than a quarter million dollars a year. Republicans have pounced on that.

"Wait till you see the market's reaction to what he unveils later this week, which is increasing taxes in the middle of a deep, deep recession," said Minnesota Gov. Tim Pawlenty on Fox News Sunday.

Louisiana's Republican governor, Bobby Jindal, will give his party's official response to Obama's Tuesday address to a joint session of Congress. Jindal told NBC's Meet the Press on Sunday that he won't take the $100 million for Louisiana's unemployed that's in the stimulus package.

"I think we just have a fundamental disagreement here. I don't think the best way to do that is for the government to tax and borrow more money. I think the best thing they could have done, for example, was to cut taxes on things like capital gains, the lower tax brackets," Jindal said.

Some moderate Republican governors, though, are siding with the president. California Gov. Arnold Schwarzenegger told ABC's This Week that he fully expects Obama to raise taxes on wealthier people.

"I don't like that, of course, but, I mean, I understand that he has to do what he thinks is best for the country, as much as I had to make decisions [for] what is best for the state of California. So, I think there are certain things that are inevitable, especially when you have a crisis."

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