- The Washington Times - Sunday, April 10, 2011

Seeking to regain the initiative on spending cuts from House Republicans before Congress begins the 2012 budget and the debt-ceiling fights, President Obama later this week will lay out a plan to make real dents in the federal deficit, the White House said Sunday.

Making the rounds on the weekend political talk shows, senior White House adviser David Plouffe said the president in his Wednesday speech will call for increased taxes on higher-income taxpayers and for specific deficit-reduction targets the government should meet.

After sitting out much of the recent 2011 spending cuts debate, Mr. Obama is now trying to join the conversation over the next two deficit fights.

“The congressional Republican plan [is out], there’s a bipartisan group of senators called the gang of six working on something. The president is going to come out,” Mr. Plouffe said on CNN’s “State of the Union” program.

Republicans already are calling the planned speech a do-over for Mr. Obama’s 2012 budget. The blueprint was submitted to Congress two months ago but was widely panned by both parties for failing to tackle the big drivers of deficits and for using gimmicks that the nonpartisan Congressional Budget Office rejected.

Republican said the president has not shown he is ready to embrace the kinds of cuts they say will be needed to bring deficits under control.

“For the last two months, we’ve had to bring this president kicking and screaming to the table to cut spending,” House Majority Leader Eric Cantor, Virginia Republican, said on “Fox News Sunday.”

Spending is the dominant issue in Washington, with Congress still trying to wrap up the unfinished — and six months overdue — 2011 spending bills, even as the focus is shifting to 2012 budget and whether to raise the federal borrowing limit beyond $15 trillion.

The 2011 spending fight brought the federal government to the brink of a shutdown Friday night before House Speaker John A. Boehner, Ohio Republican, struck a deal with Mr. Obama and Senate Majority Leader Harry Reid, Nevada Democrat.

Their agreement keeps the government open through the end of this week, giving Congress time to pass a broader bill that will run out the fiscal year, which ends Sept. 30. Under the terms of the deal, Congress will adopt cuts that will reduce the projected deficit by $38 billion.

Of the cuts, $17.8 billion comes from mandatory spending, leaving only about $20 billion in cuts to 2010 discretionary spending. Some of those cuts are actually rescissions of previously unspent money, which means it does not affect the base line spending number.

Leaders who negotiated the deal have not released details of the programs to be cut, though. Some lawmakers were saying they would reserve their support until they see the final deal, while others have said they cannot support it.

The District of Columbia’s delegate to Congress accused her fellow Democrats of engaging in a “sellout” of the city, after leaders announced they had agreed to Republican demands to restrict D.C. spending on abortions and to restore the city’s school voucher program, which Mr. Obama had tried to end.

“We knew that the House Republicans were on the attack,” said Delegate Eleanor Holmes Norton, the city’s nonvoting representative in Congress. “What we did not anticipate was that the administration and Senate Democrats would roll over and use our right to self-govern as a bargaining chip.”

The full 2011 spending bill will receive House and Senate votes this week, just as the chambers pivot to the 2012 budget.

The House Budget Committee last week passed a Republican-written plan for 2012 that calls for major changes to the way Medicare and Medicaid operate.

Under that plan, Medicare beneficiaries would be allowed to choose from a marketplace of health plans, which could help the government control long-term costs. And Medicaid would be converted to a block grant program for states to experiment.

Budget Committee Chairman Paul Ryan, Wisconsin Republican, said his plan will reduce deficits at a much faster pace than the president’s budget, which most analysts said didn’t address entitlement spending in any meaningful way.

Mr. Plouffe said the president this week will embrace the need to do something on Medicare and Medicaid, two of the big entitlement programs, though he said Mr. Obama will shy away from the changes to the benefit structure that Mr. Ryan has proposed.

Sen. Jeff Sessions, the ranking Republican on the Senate Budget Committee, said Mr. Obama must go further than just a speech. He said given the poor reaction to the president’s 2012 budget, Mr. Obama should submit an entirely new one if he wants to play a constructive role in the budget debate.

“The president’s vision, whatever it is, must be presented in a detailed, concrete form,” Mr. Sessions said, adding he was troubled that the announcement came from Mr. Plouffe, the president’s campaign manager in 2008, rather than from a senior policy official such as the budget director.

Also looming in upcoming weeks is a fight over whether to raise the government’s debt ceiling.

Sen. Charles E. Schumer, New York Democrat, said it would be “irresponsible” to use the debt ceiling as a bargaining chip in trying to win other concessions.

“This should be taken off the table now,” he said.

House Republicans, who had sought much deeper cuts in the 2011 spending bill, said Mr. Obama will have to put serious cuts on the table again in order to win a debt-ceiling increase.

“There is no way that we Republicans are going to support increasing the debt limit without guaranteed steps being put in place to ensure that the spending doesn’t get out of control again,” Mr. Cantor said.

The cuts in the final 2011 compromise deal reached Friday are the biggest non-defense spending cuts in the country’s history when judged by dollar amount.

Still, they pale in comparison with overall spending. The federal deficit in the month of March alone is estimated to be $189 billion — dramatically more than the full-year cuts Congress is contemplating.

They also fall short of Republicans’ pledge to return non-defense discretionary spending to pre-stimulus levels.

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