Obama warns left: You won't like budget

Top White House officials are warning liberal and labor leaders to brace themselves for President Obama’s budget proposal. 

Gene Sperling, director of the National Economic Council, sought in meetings last week to lift the left’s gloom about Washington’s crackdown on spending by promising that the president this year will focus on job creation rather than deficit cutting.

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Obama staffers sought to present their budget plan as a glass half full. According to sources familiar with the briefings, they promised that the president will focus on jobs and the economy, instead of deficit-cutting, which dominated last year’s debate on Capitol Hill. 

Obama has signaled in recent weeks that he plans to run a populist reelection campaign. He will need to keep liberal activist and labor groups — important parts of the Democratic base — energized for his strategy to work. 

In his first three years, Obama had a free hand to suggest spending levels for government programs in his annual budget blueprint. But that is not the case this year because the administration is constrained by the budget deal reached in August to raise the debt limit. 

He must stick to the $1.047 trillion spending cap he agreed to with GOP leaders, which means he will call for less discretionary spending than he did last year.

Senior administration officials fear a backlash from the left and are trying to prepare their allies to expect a disappointing budget, sources say.

“A senior White House person said we weren’t going to be happy with the budget, but they’re doing the best they can” given the spending caps set by the 2011 Budget Control Act, said one source. 

Obama took fire from the left flank of his party last year after he unveiled his budget proposal. 

Members of the Congressional Black Caucus (CBC), including Illinois Democratic Rep. Jesse Jackson, Jr., ripped Obama’s budget proposal. CBC Chairman Emanuel Cleaver (D-Mo.) said at the time, “We cannot win the future by leaving our most vulnerable behind.” 

Democrats accused the president of endangering the lives of low-income people. 

“It would have real-world consequences for some pretty powerless people,” Rep. Peter Welch (D-Vt.) said. “People would literally freeze.”

This year, it appears the administration is giving Democrats a heads-up, which goes a long way in politics. 

Administration officials have kept the details of the budget largely secret. One of the few specifics to leak is a 0.5 percent pay increase for federal workers. The budget will be submitted to Congress early next month. 

Senior administration officials have reassured union leaders that the Department of Labor, including the Occupational Safety and Health Administration and the Mine Safety Health Administration, will be spared from the toughest cuts. The administration will also seek to preserve funding for the National Labor Relations Board, according to sources familiar with the discussions. 

“I know there have been a variety of meetings and discussions with White House folks on the budget,” said Mike Lux, a Democratic strategist who advises liberal and labor groups. “I know from my perspective of working at the White House in the Clinton years, you have to prepare people when there’s tough news. It’s much better to have these conversations in advance. 

“The White House has been doing a good job of briefing allies and prepping people,” he said. 

A White House spokeswoman declined to comment on the meetings. 

Administration officials told allied interest groups that Obama will make strong populist arguments to defend his agenda and bid for reelection, striking the same tone he did during a December speech in Kansas. 

Speaking in Osawatomie, Kan., on Dec. 6, Obama vowed to even the playing field for economic elites and middle-class workers. 

“This country succeeds when everyone gets a fair shot, when everyone does their fair share and when everyone plays by the same rules,” Obama said. 

Liberal groups are pleased that the president has indicated he will shift away from the discussion of deficits and spending cuts that last year overshadowed the jobs agenda they preferred to emphasize. 

“We’ve seen the pendulum go back and forth between deficits and jobs,” said one liberal advocate. “We want the president to focus on jobs and economic security and went away feeling confident the president will do that.” 

Still, there remain differences between the administration and its allies on important policy questions. 

Some on the left have pushed vigorously for a financial transactions tax on the trade of stocks, bonds and derivatives. Liberal Sen. Tom Harkin (D-Iowa) and Rep. Peter DeFazio (D-Ore.) have introduced such a proposal in Congress. 

Sperling and other senior administration officials have not embraced the financial transactions tax, which proponents say would dampen excessive speculation. 

Administration officials worry Republicans could frame the proposal as a tax on 401(k) retirement funds, a potentially damaging election-year charge. 

Obama’s senior advisers appear more inclined to push a tax on financial institutions, such as was included in the president’s fiscal 2012 budget proposal to recoup the costs of the 2008-2009 Wall Street bailout.