In the three weeks since President Barack Obama unveiled his budget, to high praise among Democrats, a series of economic and political pitfalls have appeared that could dramatically undercut his grandest ambitions.
New estimates from Congress of the president’s spending plan are projecting deficits far higher than the Obama administration had calculated — possibly more than $1.5 trillion higher over the next 10 years.
That bad news, combined with other developments, portends a rocky road for the Obama budget, which initially was hailed by Democrats for its ambitions in promoting such liberal priorities as expanded access to health insurance and efforts to curb global warming.
In the weeks since, fiscally conservative Democrats have raised increasing concerns about the budget’s proposed spending increases. Leaders of the House and Senate tax-writing committees have criticized some of Obama’s proposed tax increases on wealthier Americans. And influential Democrats are backing away from using a legislative shortcut that may be Obama’s best hope for passing his health and energy policies.
An additional multibillion-dollar bailout for banks and other financial institutions, which the administration will propose soon, is expected to add more pressure to the government’s finances.
Into that tinder box, a lit match has come from new estimates emerging from Congress that add substantially to Obama’s projected deficits.
Where Obama’s budget predicts rolling up $7 trillion in cumulative deficits over the next 10 years, Sen. Kent Conrad (D-N.D.) on Thursday pegged the deficits at $1.6 trillion higher over that period. Conrad, chairman of the Senate Budget Committee, said the figure was calculated by his panel’s Democratic staff.
The non-partisan Congressional Budget Office is expected to issue a similar assessment Friday.
Sen. Ben Nelson (D-Neb.) one of a group of about 15 moderate Democrats who are concerned about Obama’s spending levels, said the White House may have to reassess its priorities in light of the new Congressional Budget Office estimates.
“That will influence what we might think is the appropriate level of spending — what might be put off to another budget, what we can pursue incrementally,” said Nelson, a Budget Committee member who has been meeting with other moderates about every other week to discuss the budget.
“I think this budget is in for some tough sledding,” said Sen. Lindsey Graham (R-S.C.). “Some components of his budget are going over like a lead balloon.”
But House Speaker Nancy Pelosi was undeterred.
“Our priorities are the same,” said Pelosi (D-Calif.). “You can’t say we are going to do less because those numbers are pessimistic.”
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The White House also said the projections would not force a change in course.
The year’s budget debate formally begins next week, when House and Senate committees are expected to draft a budget resolution, a non-binding blueprint that sets spending and tax priorities for the year. Democratic leaders hope the full House and Senate can act on those plans the following week, before spring recess.
The budget will force Congress, for the first time this session, to make tough choices between competing priorities.
Some Democrats and administration officials would like the health-care plan, as well as Obama’s climate-change proposal, to be included in a fast-track budget procedure called “reconciliation.” That is a special bill that cannot be filibustered in the Senate, which means Democrats could pass it with just 51 votes.
The Obama administration has not ruled out the possibility of folding the health-care and energy initiatives into reconciliation. But Republicans have protested, because that tactic would effectively remove any incentive for Democrats to get GOP input and support for a bill that would include major policy changes.
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