Tuesday, February 24, 2009

President Obama on Monday vowed to reel in wasteful Washington spending and blasted deceptive “accounting tricks” used by the Bush administration to fund the Iraq war even as House Democrats released a $410 billion stopgap spending bill studded with thousands of pork-barrel projects.

The 1,000-plus-page spending bill provides a fat target for deficit hawks. It includes hundreds of pages of earmarks - pet spending projects inserted by lawmakers, ranging from $185,000 for coral reef research and preservation in Maui County, Hawaii, to $55,000 in meteorological equipment for Pierce College in Woodland Hills, Calif., to $9.9 million for science enhancement at historically black colleges in South Carolina.

House Speaker Nancy Pelosi, California Democrat, defended the spending blueprint that is needed to fund more than a dozen Cabinet departments for the final seven months of the federal fiscal year. She said the increases were needed to fund programs and policies starved for dollars under President George W. Bush. It is a $30 billion, or 8 percent, increase over comparable budgets for the same departments in fiscal 2008.

A spokeswoman for House Appropriations Committee Chairman David R. Obey, Wisconsin Democrat, said each earmark included in the bill was spelled out and linked to the member who had requested it, a disclosure practice that began when Democrats regained control of the House in 2006.

“There aren’t nearly as many earmarks in these bills as there were when [the Republicans] were in power, and unlike those days, every earmark is listed, every sponsor identified, and the public has a chance for real accountability,” said Kirstin Brost, a spokeswoman for Mr. Obey.

At the White House, Mr. Obama, who sharply attacked earmarks on the campaign trail, did not take a stance on the thousands of items included in the bill.

“Let me not get ahead of a discussion with him, not having seen or not have had lain on his desk what Congress might ultimately send him,” press secretary Robert Gibbs told reporters.

Speaking at a summit called to review the nation’s teetering fiscal situation, Mr. Obama offered a stern warning to budgeting of the past and pledged to reinstate pay-as-you-go rules to cut the $1.3 trillion federal deficit in half by the end of his first term.

“The pay-go approach is based on a very simple concept. You don’t spend what you don’t have. So if we want to spend, we’ll need to find somewhere else to cut,” Mr. Obama told economists, union leaders, policy wonks and lawmakers from both parties.

“This is the rule that families across this country follow every single day, and there’s no reason why their government shouldn’t do the same.”

Mr. Obama said pay-go budgeting helped the United States end the 1990s with a $236 billion surplus under the Clinton administration.

On Tuesday, Mr. Obama will address a joint session of Congress to outline his take on the state of the union and on Thursday will present Congress with his first budget, covering fiscal 2010. But on Monday House Democrats took the first step to clearing up the budget for the current fiscal year that stalled amid fights between Democrats and the Bush administration. Congress kept the government working with a temporary omnibus spending bill that expires March 6.

Combined with the three spending bills already approved for homeland security, defense and veterans programs, discretionary spending would top $1 trillion for the first time.

In addition to the basic operations of government, the new budget includes 775 pages of earmarks, funding programs that include local museums, colleges and infrastructure projects.

Among the earmarked projects in the bill are $764,000 for the Lake George Watershed Protection Initiative in New York, requested by Sen. Kirsten Gillibrand, New York Democrat; $9.9 million for South Carolina’s historically black colleges and universities, requested by House Majority Whip James E. Clyburn, South Carolina Democrat; and $1.1 million requested by Senate Republican Conference Chairman Lamar Alexander and Sen. Bob Corker, both of Tennessee, for water treatment plant improvements in Tennessee’s Unicoi County, as well as $300,000 for a sewer extension project in another county.

The spending bill also included a small number of policy “riders,” including one limiting the right of Mexican truckers to haul freight on U.S. routes and another blocking any Agriculture Department rule to ease Chinese poultry exports to the United States.

Republicans attacked the earmarks and the higher spending levels, noting the bill comes just over a week after Congress approved Mr. Obama’s $787 billion stimulus package of spending increases and tax cuts to bolster the ailing economy. They also complained that the huge appropriations bill will be rushed through Congress, with the House set to debate and vote on the bill as early as Thursday.

“On the heels of a trillion-dollar stimulus bill, this huge increase will have a devastating impact on our federal debt and sets a dangerous precedent for future federal budgets,” said a statement released by Republicans on the House Appropriations Committee. “To make matters worse, this massive spending bill was crafted under covers and out of view of the American public.”

House Republican leaders said that instead of increasing spending, Congress should freeze spending at 2008 levels.

“At a time of record deficits, a freeze would allow the federal government to keep functioning at current spending levels without requiring beleaguered taxpayers to pay for new spending increases,” says the letter sent to Mrs. Pelosi and Majority Leader Steny H. Hoyer of Maryland.

The president and his aides acknowledged that the $787 billion economic stimulus plan is adding to the nation’s debt, but said his budget will take that into account.

“We cannot and will not sustain deficits like these without end. Contrary to the prevailing wisdom in Washington these past few years, we cannot simply spend as we please and defer the consequences to the next budget, the next administration or the next generation,” Mr. Obama said.

Among the cuts he outlined: ending payments to agribusiness, eliminating no-bid contracts in Iraq, stopping Medicare fraud, and ending tax breaks for companies that ship jobs overseas - a regular campaign promise that Mr. Obama hasn’t mentioned recently.

The president and his aides suggested that the best way to get to fiscal stability is to pass health care reform, saying that it may cost money in the short term but will have the strongest long-term financial benefit.

Mr. Obama said Monday he was appointing Vice President Joseph R. Biden Jr. and a former inspector general to oversee economic stimulus spending, also warning a gathering of the nation’s governors that it “sounds like politics” when they argue over small portions of his stimulus plan.

Mr. Obama said Mr. Biden’s job, working with governors and mayors to “keep things on track” as they spend the money, proves “how important it is for our country” and “a willingness to get this right.”

The president named Earl Devaney, a former Secret Service agent, as chairman of the newly formed Recovery Act Transparency and Accountability Recovery Board. Mr. Devaney was inspector general at the Department of the Interior and was key to uncovering the political-influence scandal tied to disgraced lobbyist Jack Abramoff.

“This is not a blank check,” Mr. Obama said. “The American people are watching, they need this plan to work, and they expect to see their money spent with its intended purpose.”

Mr. Obama also offered remarks pointed at Republican critics of his plan who appeared on cable news shows over the weekend to blast it as wasteful.

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