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Obama Vows Budget Fight for His Priorities

By Adriel Bettelheim, CQ Staff

March 17, 2009 – President Obama vowed Tuesday not to scale back his health care, education, or environmental initiatives during debate on the fiscal 2010 budget, despite the prospect of higher deficits and wariness in Congress.

Following a private White House meeting with Senate Budget Chairman Kent Conrad, D-N.D., and House Budget Chairman John M. Spratt Jr., D-S.C., Obama renewed his push to get Congress to adopt a budget resolution that would make room for his priorities. He said that his expansive budget is necessary to provide "an economic blueprint for the future."

Obama said, "With the magnitude of the challenges we face right now, what we need in Washington are not more political tactics—we need more good ideas. We don't need more point-scoring—we need more problem-solving."

Obama challenged his critics to offer "constructive, alternative solutions."

The $3.55 trillion budget proposes costly expansions of health care and education, and a continuation of the government's role in protecting financial markets. It projects a $1.17 trillion deficit for the fiscal year that begins Oct. 1—a reduction from the $1.75 trillion in red ink expected for the current fiscal year.

The budget calls for creation of a "reserve fund" of $634 billion over 10 years to cover an expansion of health care coverage. It also proposes enacting a cap-and-trade system on carbon emissions that would raise $646 billion in revenues, $120 billion of which would be dedicated to renewable-energy programs.

Obama is preparing for a tough fight, and acknowledged as much when he alluded to "some numbers with respect to the budget that may make this even tougher in the coming couple of weeks."

The Congressional Budget Office is expected to release its scoring of the president's plan this week.

Many details of Obama's plan have not been fleshed out, including how he would tier income tax brackets, the details of his cap-and-trade system, and his ideas for cracking down on offshore tax avoidance by U.S. corporations.

But the broad principles are clear. To help pay for the health care reserve fund, Obama would increase revenue by about $318 billion over 10 years by reducing the value of itemized deductions claimed by taxpayers in the top two income tax brackets. That proposal, in particular, has met substantial criticism on Capitol Hill, including from many Democrats.

Meanwhile, as the Budget committees prepare to start work on drafting a fiscal 2010 budget resolution, House Majority Leader Steny H. Hoyer, D-Md., said Tuesday that Democratic leaders are still weighing the option of using the budget reconciliation process to advance Obama's initiatives.

That fast-track process allows legislation drafted pursuant to an adopted budget resolution to pass the Senate by a simple majority, with limited debate, avoiding the need to muster 60 votes to overcome a filibuster.

Hoyer noted there is a lot of resistance in the Senate against using the process for an overhaul of health care. But he also pushed back against the idea that reconciliation should be used solely for legislation whose primary purpose is to reduce the deficit.

"The real purpose of reconciliation is to try to get, not so much our policies, but the policies of the majorities of both houses," he said. "That's seems to be a concept that has alluded many that in America the majority rules."

House leaders have been frustrated by the Senate's inability to move the Democratic agenda in recent years. Democratic leaders have often been unable to assemble the 60 votes needed to avoid Republican filibusters.

There also is resistance to moving a cap-and-trade bill through reconciliation. Last week eight Democrats and 25 Republicans in the Senate wrote the Budget Committee requesting that the expedited process not be used for a climate change bill.

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