Budget Battle Showdown as Congress Strips Billions from Obama's Proposal

Rolling up its sleeves, Congress has begun revising President Obama's budget, an ambitious $3.6 trillion package unlikely to survive intact after new forecasts of skyrocketing deficits. Last week, Obama energetically sold his blueprint at a prime-time news conference and a lunch with Senate Democrats, with whom fractures are emerging. A bloc of 16 moderates, many behind a bipartisan effort that whittled the economic stimulus down to $787 billion, is preaching budget discipline.

The political reality: Democrats say they have the numbers in Congress to pass a budget resolution resembling Obama's, and they hope to approve versions in the Senate and the House by the end of the week. That hasn't halted attacks from the GOP. John Boehner, the top Republican in the House, called the Obama budget "monstrous," saying it spends too much, taxes too much, and borrows too much.

Another critic is New Hampshire's Judd Gregg, who stunned the political world last month when he accepted, then rejected, the job of commerce secretary. A deficit hawk, Gregg is the GOP's top man on the Senate Budget Committee. He said Obama's plan for the next fiscal year would "significantly move the government to the left, make it much more expansive and inclusive than it is today, much more costly, and much more of a burden on our children."

It's routine for Congress to add to or subtract from a president's proposal. But cuts became all but inevitable after a report from congressional budget analysts said the plan would trigger deficits unlike any seen since the end of World War II. They expect a cumulative deficit of $9.3 trillion in 10 years ending in 2019, a full $2.3 trillion higher than Obama's own forecast.

Democrats, including the moderates, blame George W. Bush, saying he handed Obama a country deep in debt and an economy in crisis. Still, the moderate Dems are calling for a "return to fiscal sanity" and insist that Obama's budget needs to be modified to reflect "the ever worsening fiscal reality." A Senate measure would trim $15 billion from Obama's proposal, and the House will take up cuts of about $7 billion. One item unlikely to survive: Obama's middle-class tax cut of $400 per worker or $800 per couple, which is funded only this year and next. On the other hand, certain cuts the president wanted, such as in agriculture subsidies, might be ignored.

In his news conference last week, Obama acknowledged lawmakers would not take his proposal, "simply Xerox it, and vote on it." With votes planned later this week, the fight over what's in—or out—is to continue late in April when House-Senate negotiators hammer out a final budget. Until then, look to Democratic leaders to play down intraparty fissures as Obama's team believes Congress will do his bidding. Peter Orszag, Obama's budget director, said he expects Congress to hew to the president's priorities in healthcare, energy, education, and cutting the deficit in half by 2013. Orszag insists that what Obama wants and what is emerging in the House and Senate are close kin. They "may not be identical twins," he quipped, "but they are certainly brothers that look an awful lot alike."

• Read 'The Republican Party Looks to Repair Its Image.'
• Read 'How Obama is Selling His Economic Agenda.'

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