Deficit Report Puts White House On Defensive The Obama administration is on the defensive this week after a damaging report by the Congressional Budget Office. It projected that the White House's proposed budget would create trillions of dollars in deficit. What could this mean for the president's ability to pursue his agenda?
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Deficit Report Puts White House On Defensive

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Deficit Report Puts White House On Defensive

Deficit Report Puts White House On Defensive

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This is MORNING EDITION from NPR News. Good morning. I'm Renee Montagne.


And I'm Steve Inskeep.

President Obama says he proposed a more honest budget than his predecessors. Now he faces criticism from lawmakers who worry that reality may turn out to be more brutally honest than his budget.

MONTAGNE: This is a debate over numbers and predictions. If the economy recovers quickly the government will have more tax money to spend and that's what President Obama expects. If the recovery comes more slowly the government will face breathtaking budget deficits.

INSKEEP: And that's what the congressional budget office is forecasting, expecting more than one $1.8 trillion dollars in borrowing this fiscal year. We'll get some analysis this morning from NPR's Juan Williams, filling in for Cokie Roberts. Juan, good morning.

JUAN WILLIAMS: Good morning Steve.

INSKEEP: Lots of ambition to the president's budget. He wants to restore the economy, of course, but also wants to fix health care, change energy, many other things. Does this grim forecast mean that some of the president's priorities have to wait?

WILLIAMS: Well I would not say wait, Steve. The president said, over the weekend, he's not going to tolerate cuts in the key investments that you were just talking about: health care, education and energy. So it's not a case of willingness to wait. But Peter Orszag, the head of Office of Management and Budget, and the president have said that no one expects that people on the Hill, the key budget committees, are going to simply Xerox the administration's budget and put it up for a vote. So that leaves them, then, to three scenarios, Steve. They can cut other spending, rather than those three key areas that we've talked about. Two: they can cut the amount invested in energy, education and health care. Or three: they can increase taxes on people under $250,000.

So they have, really, sort of an unsavory selection there before them. And the difficulty, you know, in cutting other spending was illustrated just last week when we had a veterans' group go to the White House and then the Capitol Hill to complain about a simple plan to charge private insurers for treating veterans who needed amputation or stress disorders. They were talking about just one percent of the Veterans Administration budget and, you know, the White House then backed away from it because they were being portrayed as not being faithful to the American soldier.

INSKEEP: And some of the president's critics, or people who say that they want to support him but are having trouble doing it, will have their opportunity to give their own proposals. Kent Conrad, the Democratic budget committee chairman, is dubious; he'll come up with his own budget this week. Judd Gregg, the Republican from New Hampshire, who was almost the president's Commerce secretary, spoke yesterday on CNN.

INSKEEP: We're talking about a deficit in the trillion dollar range for as far as the eye can see. We're talking about deficits which are four to five percent of GDP, which is not sustainable under any form of government. We're talking about a public debt. This is the debt that the people own, of the federal government, that will be around 80 percent of GDP. Historically, it has been around 40 percent of GDP in the out years. The practical implications of this is bankruptcy for the United States. There's no other way around.

INSKEEP: That's Judd Gregg on CNN. Juan, I want to mention some other names, Susan Collins of Maine, moderate Republican, state that voted for Obama. She was with him on the stimulus, is dubious of this budget. David Brookes, New York Times columnist, conservative, seemed to be very much a fan of Obama, seems to be breaking away now. Are moderates, if you call them that, in both parties breaking away from the president here?

WILLIAMS: Well, you know the argument that the conservatives have been making, that this Obama budget is all about tax and spend seems to be taking on some, you know power in terms of the American imagination. And even Ken Conrad, that you mentioned, chairman of the Senate budget committee, has said, look we going to have to slice billions from this budget, we're going to have to have smaller budgets. There's no question about it.

And then you throw in, you know, centrists. I mean, even on the Democratic side, people like Senator Ben Cardin of Maryland, Claire McCaskill of Missouri, Tom Harkin of Iowa, they're saying we have to adjust the spending, tighten the budget; we need to shift the timeframe. What you're hearing here, Steve, is people who are concerned about 2010 - the midterm elections - or 2012, and they're saying look at the polls.

You know, 37 percent of American in a Pew poll last week say they're angry at the size of the deficit. Another 46 percent say they're bothered. So, President Obama has been out, literally, on a campaign for this budget. You know that he was on Jay Leno last week. But Tuesday night he's going to have a press conference. Over the weekend, he had people going door-to-door around the country, e-mails flying, saying, support the president's budget. Let your elected officials know that you support it.

You know, so, this is a real political budget effort. I don't think we've ever seen anything like this in American politics.

INSKEEP: Juan, in a few seconds, are there some fiscal moderates or centrists who are saying that they can support the president? They say, hey, it's an emergency, everything will work out.

WILLIAMS: Steve, they haven't called me. I haven't heard from them yet.


WILLIAMS: I haven't heard about that one. I think people are keeping their heads low.

INSKEEP: Juan, thanks very much.

WILLIAMS: You're welcome, Steve.

INSKEEP: NPR News analyst Juan Williams.

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