Wednesday, March 25, 2009

Bowing to stiff opposition on Capitol Hill, President Obama on Tuesday backed away from his call to deal with climate change as part of the budget, saying he never expected to get everything he asked by demanding that Congress use its major spending blueprint to act on health care, education, alternative energy and deficit reduction.

In a prime-time press conference, the second of his presidency, Mr. Obama pushed to keep alive as many of his campaign promises as possible. He told lawmakers that his ambitious budget that funds those priorities is “inseparable” from their goal of putting the economy on sound footing.

“I want to see health care, energy, education and serious efforts to reduce our budget deficit,” Mr. Obama said.

He acknowledged that Congress won’t “simply Xerox” his plan but drew lines in the sand as lawmakers this week lay out counterproposals to the president’s $3.6 trillion 2010 budget. Mr. Obama travels to the Capitol on Wednesday to urge Senate Democrats to back his blueprint.

While taking 13 questions and allowing repeated follow-ups from reporters, the president talked about wrestling with the moral and ethical dimensions of his decision to expand federal funding for embryonic stem cell research, defended the U.S. dollar as the foundation of the world economy and said Americans are rightly judging him on his performance, not his race.

See related analysis: BELLANTONI: Budget ‘sold’ as central to recovery

In the six weeks since his last press conference, Mr. Obama has seen Treasury Secretary Timothy F. Geithner battered by criticism over corporate bonuses in companies taking a taxpayer-funded bailout, has signed a $410 billion catch-all spending bill in private while promising in public to try to control spending, and has said he will try to rev up his campaign supporters to push for his budget.

“I’m as angry as anybody about those bonuses,” said Mr. Obama, though he blamed them on a broken corporate culture and said they happened before his administration took office. He said he purposely delayed his own outraged reaction as he tried to gather his thoughts.

“It took us a couple of days because I like to know what I’m talking about before I speak,” he said.

On climate change, Mr. Obama yielded to pressure from lawmakers on Capitol Hill who told him not to try to pursue his carbon emissions cap-and-trade program through the budget.

The president said he understands that Congress needs to hash out the details and that he expects the regular legislative process, which means the plan is subject to a filibuster. Legislation protected by the budget would have needed only a majority vote.

“Our point in the budget is: Let’s get started now. We can’t wait. And my expectation is that the energy committees or other relevant committees in both the House and the Senate are going to be moving forward a strong energy package,” Mr. Obama said. “It will be authorized. We’ll get it done. And I will sign it.”

He did not back away from his proposal to limit the income tax deductions that the wealthy can take for making charitable contributions - a plan both Republicans and Democrats say is likely dead - and to cut the interest deduction for mortgages.

He contradicted a study by the Center for Philanthropy at Indiana University that calculated charitable contributions could drop by 5 percent under the plan.

Mr. Obama, obviously prepared to talk in depth about the dominant issue of the economy, repeatedly pointed to his budget as the solution for the country’s long-term problems.

The president said that if the country does not invest in his key reform priorities, “we won’t grow.”

“We’ll allow China or India or other countries to lap our young people in terms of their performance. We will settle on lower growth rates, and we will continue to contract, both as an economy and our ability to provide a better life for our kids,” he said.

He even used a question about race and the historic nature of his presidency to turn back to his economic plans.

“The last 64 days has been dominated by me trying to figure out how we’re going to fix the economy, and that affects black, brown and white,” said Mr. Obama, the nation’s first black president.

He said on Inauguration Day that the country was justifiably proud of that milestone, “but that lasted about a day.” He said since then he’s been judged on his performance, and said that means “the American people are judging me exactly the way I should be judged.”

The president’s personal approval ratings remain high, but Republicans said his big challenges are still to come.

“This budget is far out of the mainstream, and we wouldn’t have to see a campaign to try and convince moderate Democrats to support this budget if it was reflective of the mainstream of this country,” said House Minority Whip Eric Cantor, Virginia Republican.

Mr. Obama portrayed the economic choice facing the country as between the Republicans’ record of overspending and tax cuts for the wealthy and his own plan of spending and a mix of tax increases and cuts.

He said Republicans have lost credibility by not proposing an alternative.

“The critics tend to criticize, but they don’t offer an alternative budget,” he said.

Mr. Obama himself has presented only a budget outline and Democrats in Congress are only now finalizing their budgets, to which House Republicans have promised an alternative.

Rep. Paul D. Ryan of Wisconsin, the top Republican on the House Budget Committee, said Mr. Obama’s charge is wrong.

“To suggest that we are not offering alternatives to this vision to Europeanize America is simply incorrect, and it’s to offer up a false straw man, which is an intellectually lazy argument,” he said in an interview.

“We should debate our alternative visions rather than suggesting that we don’t have a vision. It’s easy to win that argument,” he said.

On embryonic stem cell research, Mr. Obama said he did wrestle with the moral dimensions of his decision to expand federal funding. Many pro-life advocates object to such research because it destroys an embryo, and they argue there are other avenues of more promising research.

“I don’t take decisions like this lightly,” said Mr. Obama, adding that he respects those who disagree with him.

“But I think that this was the right thing to do and the ethical thing to do. And as I said before, my hope is, is that we can find a mechanism, ultimately, to cure these diseases in a way that gains 100 percent consensus.”

Amid calls from China and Russia that the dollar be replaced as the world’s reserve currency with a global denomination, Mr. Obama said the world retains its faith in the U.S. economy, pointing as evidence to the growing strength of the dollar. He rejected calls for replacing the U.S. dollar as the bedrock currency.

“I don’t believe there is a need for a global currency,” he said.

Mr. Obama wrapped up the press conference by saying that on key issues, such as his plans to unfreeze credit markets, relations with Iran, lessening the influence of lobbyists in Washington, and Middle East peace, it will take time for progress to be made.

“This is a big ocean liner. It’s not a speedboat. It doesn’t turn around immediately. But we’re in a … better place because of the decisions that we made,” he said.

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