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Aides Defend President's Budget
White House and Fiscal Conservatives Set for Showdown

By Michael A. Fletcher
Washington Post Staff Writer
Monday, March 2, 2009

Top aides to President Obama yesterday defended the ambitious plans laid out in the administration's proposed $3.6 trillion budget for next year, calling the spending necessary to reignite the economy and put the country on a path to sustainable growth.

White House Chief of Staff Rahm Emanuel portrayed the president's budget -- which envisions huge investments in alternative energy, education and health care while raising taxes on top income earners and oil and gas companies -- as essential to reshaping the nation's economy. "It rejects the past and says we are going to be a culture and a society that invests and saves," he said on CBS's "Face the Nation."

The budget proposal, which includes a $1.75 trillion deficit, comes after the administration was able to enact a $787 billion economic stimulus bill, which Obama has called the most sweeping economic measure in the nation's history. Meanwhile, hundreds of billions dollars more could be needed to stabilize the nation's financial system. Also, two of the nation's largest automakers are looking to the federal government to provide billions in aid to help them avoid bankruptcy and modernize their operations.

Some analysts have called Obama's spending plan the biggest shift in national priorities since at least the era of President Ronald Reagan, which ushered in a period of deregulation, freer markets and less government involvement in the economy. Consequently, many Republicans are promising to battle Obama's proposal.

"I think it's terrifying in the policy implications as well as mind-boggling in the numbers," Sen. Jon Kyl (R-Ariz.) said on "Fox News Sunday."

Speaking on the same program, Rep. Paul D. Ryan (R-Wis.) called Obama's proposed budget "probably the biggest rewrite or transformation of our federal budget since the New Deal."

The Republicans who have vowed to oppose Obama's budget say the rush of deficit spending and targeted tax increases would further damage the nation's floundering economy. "You don't raise taxes in a recession," Ryan said.

White House budget director Peter Orszag pointed out that the proposed tax increases would not take effect until 2011, when the administration and many outside economists project the current recession will be over. Moreover, he said, the proposed spending on education and health care would benefit most Americans.

"All in all, this budget makes the vast majority of American families better off," Orszag said on ABC's "This Week."

The White House has defended the budget against Republican critiques, saying that an extended period of lighter regulation, low taxes, and less federal investment in the social safety net has disproportionately helped only the nation's very top wage earners while leaving the larger economy in tatters.

Increasingly, the administration is employing populist rhetoric to make its point. In his radio and Internet address Saturday, Obama said, "I know these steps won't sit well with the special interests and the lobbyists who are invested in the old way of doing business, and I know they're gearing up for a fight as we speak. My message to them is this: So am I."

Even as they defended Obama's spending plan, his aides said the president would sign a spending bill to fund the government for the rest of the fiscal year, even though it contains nearly 9,000 "earmarks," which are spending requests added by lawmakers. During the campaign, Obama said that he would work to limit earmarks and make them more transparent.

"This is last year's business," Orszag said. "We want to just move on."

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