Obama's $3.8T budget faces tough reaction from Dem, GOP lawmakers

President Barack Obama's $3.8 trillion budget will get a much tougher reception from lawmakers than last year's request.

Obama's budget will pinch pennies on one side and increase spending to jumpstart the ailing economy with a $100 billion jobs bill. Despite cutting maneuvers, the budget is still projected to leave a $1.27 trillion deficit.

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With unemployment still at 10 percent, congressional Democrats are opposing Obama's expected pivot to deficit reduction in his 2011 budget request. Liberal members have panned Obama's proposed freeze of most non-defense discretionary spending, warning that curtailing domestic spending could slow job growth, while appropriators are moving to protect programs on the White House chopping block.

"The administration has two very different goals in its budget," said Thomas S. Kahn, the staff director and top Democratic aide on the House Budget Committee. "The first is to make sure that the economy continues to recover, and the second is to put into place policies that over the long term will reduce the deficit. It’s a real challenge to do both goals."

The $3.5 trillion 2010 budget resolution that Congress adopted last April largely tracked with the proposal put forth by the president. The budget resolution, which sets spending caps for annual appropriations bills, allowed spending to rise by nearly 10 percent compared to the previous year, roughly the same increase that Obama's $3.6 trillion budget proposed. Both documents emphasized the same top priorities pushed by the White House — healthcare reform, education investments and new energy programs. While no Republican voted for the resolution, it received relatively broad support, getting 233 votes in the House, the most of any budget since 1997.

The resolution, which can't be filibustered, got 53 votes in the Senate.

This year's budget process is shaping up to be more contentious. Obama is taking steps to deal with red ink in the budget, starting with a call for a three-year freeze on discretionary spending unrelated to national security, defense, veterans' affairs and foreign operations. It would apply only to an eighth of the federal budget and save roughly $25 billion a year over the next decade — when annual deficits are expected to be around $600 billion. The freeze wouldn't affect Obama and Democrats' plans for a job creation bill likely to include new programs and tax breaks for small businesses, infrastructure projects and state fiscal aid. The jobs bill, which Obama made a top priority in his State of the Union speech, would be passed outside the annual appropriations process.

As soon as the freeze proposal leaked out last week, a number of Democrats said that more spending is still needed.

"I'm just concerned that in a recessionary time, you don’t pull back government,” said Sen. Sherrod Brown (D-Ohio). “What does that mean for job growth?"

House and Senate Democratic leaders have yet to back any spending freeze. Speaker Nancy Pelosi (D-Calif.) said that any freeze should also apply to some defense spending, and specifically to money that goes to military contractors, whom she held responsible for $296 billion in cost overruns in weapons acquisitions programs in 2008.

Kahn said that jobs can be created and the deficit can be reduced to a sustainable level, but that the two goals won't be easy to come by.

"First, we still don't know how much longer before the economy starts generating significant job growth," Kahn said. "And second, it is never easy for Congress to enact major deficit reduction measures. Unfortunately, there really is no low-hanging fruit left. It's already being picked."

Other fiscal responsibility measures Obama is backing include the creation of a bipartisan fiscal commission by executive order to produce a plan to rein in the $12.3 trillion national debt and an additional $20 billion in cuts to programs.

With Obama looking for ways to trim spending, lawmakers whose districts will be affected are sure to push back. Democratic and GOP lawmakers from states with NASA bases are already sounding the alarm about the administration's plan, first reported last week by the Orlando Sentinel, to cut the Constellation manned space travel program. The budget will shift funding toward commercial space flights.

"We need to make sure we balance the proposed cuts in the moon program with making sure ... we are not cutting the legs out from NASA," said Rep. Debbie Wasserman Schultz (D-Fla.), an appropriator.

Obama shouldn't expect much support from Republicans, who are criticizing the proposal for not going far enough.

"I'm worried that you'll have just enough policy to allow rhetoric of fiscal responsibility, but the substance won't be about fiscal responsibility," said Rep. Paul Ryan (R-Wis.), the ranking member of the House Budget Committee.

GOP members have criticized the White House and Democrats in Congress for passing big-ticket items, such as the $787 billion stimulus, that contributed to a record $1.4 trillion deficit in 2009 and failed to stop the jobless rate from hitting double digits. The president has sought to blunt some of the attacks on spending, reminding House Republicans at their annual retreat Friday that last year's deficit was projected to hit $1.2 trillion in January 2009, before his policies were implemented.

William Hoagland, a former Republican staff director on the Senate Budget Committee, said the White House deserves a pass for spending last year, when the recession was in full swing.

"They had to do what they had to do, and otherwise it would be a worse situation," said Hoagland, now vice president of public policy for Cigna. "Once you're 12 months into [the presidency], it becomes a little bit more difficult to blame George Bush for everything."

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