Analysis:
Obama budget lays down opening bid

[February 15, 2011]  WASHINGTON (AP) -- The president's budget has all the trappings of a financial document -- ledgers, tables, economic projections. But it is, foremost, a political declaration.

With this budget, President Barack Obama seeks to cast himself as a sensible fiscal manager -- not too harsh, not too soft -- while exploiting internal Republican struggles over how much cutting is too much.

It relies on policies that, to date, have been legislatively unattainable. It depends on long-term fixes to achieve short-term gains. It avoids the biggest, and most politically sensitive, budget items -- Social Security and Medicare.

In short, it is a marker, an opening gambit that will either play itself out on the negotiating table or on the bully pulpit that the president has begun to employ with more and more frequency these days. And while Republicans were not declaring it dead on arrival, the White House was not setting take-it-or-leave-it ultimatums.

"We understand that that's the beginning of the process," said White House budget director Jacob Lew.

But the debate is driven by two fundamentally different goals. Obama wants to increase some spending to push the economy along with a modest "down payment" toward a long-term goal of deficit reduction. For Republicans prodded by tea party activists, lowering the deficit is merely a means to a larger aim -- shrinking the size of government.

In the end, the politics -- and by extension, some of the policy -- will be determined by who better defines the argument.

To be sure, deficits matter and Obama's budget provides a strong argument for further efforts to reduce them. The cumulative total of deficits would result in a $16.7 trillion national debt by Sept. 30, 2012, up from the current $14 trillion. The bigger the debt, the bigger the interest that the taxpayer must pay.

In that sense, White House officials say, the budget debate has changed.

"The traditional debate in Washington is Democrats want to spend, Republicans want to cut," said White House communications director Dan Pfeiffer. "That's not the debate we're having right now. There is unanimity right now that we have to cut spending."

The question is how fast and how deep -- and who will raise the prospect of revamping Social Security and Medicare first. The two major entitlement programs, the biggest two items in the federal budget, have always proven to be politically toxic.

Lew argued that presidential proposals for overhauling Social Security in the past have failed, and as a result, need bipartisan consensus. "When a president came forward with a proposal, it reflected that president's point of view, and it set the process back, not forward," he said.

Illustrating the difficulties for both parties, a poll last week by the Pew Research Center found that Americans no longer want increases in federal spending -- underscoring the challenge Obama has in pitching the need for more money on education, infrastructure and research and development.

But the poll also found tepid support for spending cuts, even as House Republicans seek to trim $61 billion from the seven months remaining in the current fiscal year. For instance, the poll found that only 12 percent want cuts in Medicare spending, though that's a higher percentage who favor trims in the program than in 2009. Indeed, the only subject area that Pew found substantial support for cutting was in global poverty assistance.

Obama's $3.73 billion budget envisions deficit reductions of $1.1 trillion over the next 10 years. It includes a budget freeze, a suspension in pay hikes for the federal civilian workforce, and cuts in targeted programs, including popular energy assistance for the poor. There are billions in unspecified cuts and revenues. And it envisions new revenue from limiting tax deductions taken by wealthier taxpayers, a proposal that was rejected by the then-Democratic-controlled Congress and stands less of a chance with a GOP-run House now.

In his budget statement, Obama invoked the new White House slogan -- "Winning the Future" -- but Democrats did not react with enthusiasm. Sen. Kent Conrad of North Dakota, the chairman of the Senate Budget Committee, said Obama's budget does not go far enough in taking aim at the deficit.

"It must include spending cuts, entitlement changes and tax reform that simplifies the tax code, lowers rates and raises more revenue," he said.

Other Democrats complained it went too far.

"Cutting funding to programs that assist hard-working Americans, help families heat their homes and expand access to graduate-level education seems to conflict with the notion of winning the future," said Rep. Emanuel Cleaver of Missouri, the chairman of the Congressional Black Caucus.

Republicans were harsher, with House Speaker John Boehner dismissing it as a budget that "isn't winning the future, it's spending the future."

For Obama, the challenge ahead is who has the better sales pitch. And who can keep his troops in line.

[Associated Press; By JIM KUHNHENN]

Jim Kuhnhenn covers the White House for The Associated Press.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.