WASHINGTON: After overseeing the biggest spending spree in US history, President Barack Obama will devote this week to fiscal responsibility.
Yesterday the White House held a “Fiscal Responsibility Summit” with members of Congress, business and labor leaders, and dozens of advisers and adversaries to discuss how to curb a burgeoning federal deficit laden with Social Security, Medicare and Medicaid obligations.
White House officials say the president’s budget, to be presented in Congress on Thursday, will reflect the promises he made on the campaign trail, such as the expanded health insurance, while also confronting the deficit he inherited from his predecessor, President George W. Bush.
His first budget will also offer an ambitious pledge to halve the more than $1 trillion national deficit within four years in spite of having embarked on the biggest US spending spree since the 1930s.
To do that, the president will reduce Iraq War spending, end George Bush’s tax breaks for the wealthiest Americans earning over $250,000 a year by 2011, and streamline the government.
He will also promise to end the practice of keeping some items (such as the cost of the Iraq War) out of the budget. Coupled with recent stimulus spending, that will mean dramatically higher deficit numbers.
The reaction, particularly from many Republicans, was extreme skepticism, amid gloom that the recession is going to be much longer than Obama is counting on.
Obama inherited a deficit of $1.3 trillion from Bush and calculates it will rise to $1.5 trillion before coming down to $533 billion in 2013.
But that projection could be upset by a number of events, such as money saved in Iraq having to be spent on increased military involvement in Afghanistan or the failure of his $787 billion economic stimulus package, which might require further bursts of spending.
On Sunday night, Obama made his budget pitch to the nation’s governors, the first of many audiences he will ask for help as he takes on the mammoth budget deficit. It was not lost on the governors that theirs was the first black-tie state dinner hosted since Obama took office.
“I want you to know, regardless of our differences, my hope is that we can work together,” he said.
The stimulus plan also dominated the governors’ meeting at the White House today, as leading Republican governors continued their sparring by offering divergent views of the recover act, with southern conservatives saying they would reject some stimulus funds and coastal moderates embracing Obama’s plan.
Last week, the president delivered a similar message to a gathering of America’s mayors who he also invited to the White House.
Today’s address to Congress will allow the president to explain his fiscal road map to the millions of Americans who will be watching him on television, including those who may be skeptical of the president’s plans to aid homeowners fighting foreclosure or rescue banks struggling to remain solvent.
And his first address to Congress will help the president explain his economic politics and argue that legislative revisions on health care, education and energy are crucial to lifting the economy.
The address comes at an opportune time for Obama, whose approval ratings remain strong despite growing criticism about some of the administration’s economic plans.
But, while he remains highly popular among the US public at the end of his first month in office, a recent Gallup poll reports that 63 percent of Americans currently approving of his job performance is down slightly from his initial 68 percent rating in January. The percentage disapproving has doubled, from 12 percent to 24 percent.
Louisiana Gov. Bobby Jindal, a rising star in the Republican party, will deliver his party’s response to Obama’s address to congress today. He said he would accept stimulus money for many projects, but not funds to expand eligibility for unemployment because it would ultimately result in employers’ paying more taxes.
Several GOP governors, all of them known to have national ambitions, have been loudly critical of Obama’s stimulus plan, which received only 3 of 219 Republicans’ votes in Congress. The harshest critics include Jindal, Haley Barbour of Mississippi, Rick Perry of Texas, Mark Stanford of South Carolina, and Sarah Palin of Alaska, the party’s 2008 vice-presidential nominee.
