It’s looking more and more like Barack Obama’s $ 3.6 trillion budget plan is in trouble in Congress:
Key Democratic leaders were performing major surgery yesterday on President Obama’s first budget plan in an effort to bring skyrocketing annual deficits under control, while preserving the option of enacting some of the president’s most significant and costly domestic priorities.
In the budget blueprints they are scheduled to formally unveil today, Democrats in the House and Senate said they plan to cut hundreds of billions of dollars from Obama’s spending request over the next five years. They also are scrapping Obama’s plan to devote more cash to the financial sector bailout. And they are restoring some of the money-saving budget gimmicks the president said he eliminated last month when he unveiled his $3.6 trillion request for the fiscal year that begins in October.
The moves come as Republicans are pounding Obama for proposing a rapid increase in government spending and taxpayers are voicing anxiety and outrage about the gargantuan sums that Washington is already pouring into the economy and banking system.
In the Senate, the result is a leaner package that would drive the annual deficit to $1.2 trillion next year, compared with $1.4 trillion under Obama’s policies. By 2014, the deficit would plummet to just more than $500 billion under the Senate’s plan, requiring the nation to borrow $3.8 trillion over the next five years, compared with about $4.4 trillion under Obama’s proposal.
To meet those goals, Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, said he would leave out new spending for Obama’s proposed expansion of health care coverage, a program likely to cost in excess of $1 trillion over the next 10 years, as well as the president’s proposal to make permanent an $800 tax credit for working families.
Lawmakers would be free to adopt those policies as long as they did not increase the deficit, Conrad said. That means health care reform would have to be accompanied by tax increases or spending cuts equal to its entire cost, not just the $634 billion down payment Obama had proposed. And the president’s tax credit, dubbed the Making Work Pay credit, would have to be scrapped unless it were paired with a money-raising initiative of equal value.
The President heads up to Capitol Hill today to talk about the budget. Something tells me he’ll be in for an unpleasant surprise.
