W.H., Dems sound alarm on budget deficit

The White House is beginning to send strong signals that it recognizes the $1.4 trillion budget deficit is a looming political problem that needs to be addressed, even as President Obama reminds Americans that the country’s fiscal crisis originated with the Bush administration and will not be resolved overnight.

The president’s budget director, Peter R. Orszag, on Tuesday will deliver the second major speech on the deficit in a week by a top White House official. Mr. Orszag’s speech on “reining in the deficit” will be the first time that a top White House economist will look forward at the difficult task of reducing the gap between government revenues and expenditures.

Anxiety about the deficit has fueled the anger of the conservative “tea party” activists, riled by government spending and debt, and it has seeded reservations about the long-term price tags of signature items on the president’s agenda such as health care reform and climate change legislation.

A speech last week by Christina D. Romer, chairman of the president’s Council of Economic Advisers, looked at the reasons for the deficit and at how it relates to health care reform. Treasury Secretary Timothy F. Geithner appeared on NBC’s “Meet the Press” on Sunday to make clear that the administration recognizes the deficit is growing too large.

“Well, it’s going to have to come down. Now it’s too high, and I think everybody understands this,” Mr. Geithner said. “The president’s very committed to bring down these deficits.”

Republicans have hammered the administration for government spending levels, and public polling for the first time is showing that the American public is losing confidence in the president’s handling of the economic crisis. That shift occurred in the middle of last month, when a range of public surveys showed that more people (46.9 percent) disapproved of the president’s handling of the economy than approved of it (45 percent), according to the Web site Pollster.com.

“They’re using language which comes from polling and focus groups about the concern, but the substance of their action is just the opposite of their language,” said Sen. Judd Gregg of New Hampshire, the ranking Republican on the Senate Budget Committee. “The simple fact is they are in the process of growing this government at a rate that it has never been grown before.”

Mr. Gregg, who was chosen by Mr. Obama to be secretary of commerce until he abruptly withdrew before being confirmed, said the Obama administration “believes that an expanded, growing government creates prosperity. That’s the European model.”

Administration officials said Mr. Orszag’s speech is a recognition that the deficit will continue to be a challenge and an issue of concern even if health care reform is passed and will need additional treatment beyond “bending the curve” of health care costs.

Mr. Orszag’s speech will not contain any new proposals or policy solutions, but will attempt to lay a foundation for the conversations to come next year.

“Director Orszag will discuss the state of the economy, our fiscal situation, and the administration’s commitment to returning our nation to fiscal sustainability and building a new foundation for economic growth,” said Ken Baer, a spokesman for the White House Office of Management and Budget.

As his top aides try to make clear that they recognize the problem, Mr. Obama has added an element to his speeches: He reminds the public that he “wasn’t sworn in yet” when the nation’s economy took a nosedive.

“You know, you got a little bit of revisionist history, a little selective memory going on, a little amnesia about how we got into this mess,” he said at a rally Sunday in Newark, N.J. “This crisis that we are digging ourselves out of came about because of the same theories, the same lax regulation, the same trickle-down economics that the other guy’s party has been peddling for years.”

The White House notes that $5 trillion was added to the deficit by the 2003 enactment of a Medicare program that expanded access to prescription drugs, and by tax cuts in 2001 and 2003. Another $4 trillion was added, the administration says, by the bailouts required during the near-economic meltdown last autumn.

One significant political concern the White House has faced is polling that shows most Americans do not think the spending is helping them.

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