Battle Lines Quickly Set Over Planned Policy Shifts

By Lori Montgomery
Washington Post Staff Writer
Sunday, March 1, 2009

Battle lines are rapidly hardening over the broad policy shifts, massive deficits and tax increases President Obama unveiled last week in his first budget request, a 10-year spending plan thick with political friction points.

Yesterday, the president used his weekly radio and Internet address to declare his budget plan a fundamental reordering of federal priorities that would deliver "the sweeping change that this country demanded when it went to the polls in November."

The budget proposal "reflects the stark reality of what we've inherited: a trillion-dollar deficit, a financial crisis and a costly recession," Obama said. He warned off lobbyists and other critics, who, he said, "are gearing up for a fight as we speak."

"My message to them is this: So am I," he said. "The system we have now might work for the powerful and well-connected interests that have run Washington for far too long, but I don't."

Republicans and Democrats alike say the budget request, which seeks $3.6 trillion for the fiscal year that begins Oct. 1, marks the biggest ideological shift in Washington since the dawn of the Reagan administration. Fierce clashes are likely on an array of fronts, from Obama's plan to spend at least $634 billion to expand health care for the uninsured to his proposal to raise a similar sum by taxing industries that generate greenhouse gases.

The central political battle so far, however, centers on cost. The White House budget request seeks to increase federal spending by at least $500 billion over the next decade, excluding the cost of health-care reform. While Obama would pay for that initiative as well his plan to lower taxes for the middle class by raising taxes on high earners and corporations as well as cutting federal health spending, his budget would not generate enough cash to finance the additional spending he seeks for routine government programs.

As a result, his plan would produce annual deficits far larger in dollar terms than any recorded before the recession. As a percentage of the overall economy, the budget gap is projected to settle down to a more manageable 3 percent by the end of Obama's term. But Washington would continue to borrow heavily, and the national debt would double over the next five years.

As Congress this week begins reviewing Obama's request, Republicans are blasting the proposal as a historic and irresponsible enlargement of the federal bureaucracy that ultimately will force Obama to break his pledge to avoid a broad-based tax increase.

"If you think with this kind of incredible growth in government that they're going to only tax wealthy people, then I have some old lottery tickets I want to sell you," said Rep. Paul D. Ryan (R-Wis.), the senior Republican on the House Budget Committee.

Democratic congressional leaders say they expect to endorse Obama's agenda in April. But they warned that it will not be easy and predicted that a proposal to limit tax deductions taken by the wealthy for charitable giving, mortgage interest and other items may not survive.

"Folks are a little skittish. It's asking a lot," a senior Democratic aide said. "This is a tax-and-spend budget the likes of which we haven't seen in years."

In his radio talk, Obama did not address the charge that his plans are simply too expensive. But he reasserted his commitment to fiscal discipline, saying his budget team has "identified $2 trillion worth of deficit reductions over the next decade" by scouring the budget "line by line" for wasteful and inefficient programs.

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