W.H., Dems sound alarm on budget deficit

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By Jon Ward and Matthew Mosk THE WASHINGTON TIMES

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.