Obama says he's ready for fight over his budget

By DEMOCRAT-GAZETTE PRESS SERVICES

WASHINGTON — President Barack Obama described his expansive budget proposal Saturday as "a threat to the status quo in Washington" and cast himself as willing to do battle with special interests to expand health care, curb pollution and improve education.

"I didn't come here to do the same thing we've been doing or to take small steps forward," Obama said in his weekly radio and Internet address. "I came to provide the sweeping change that this country demanded when it went to the polls in November. That is the change this budget starts to make, and that is the change I'll be fighting for in the weeks ahead."

The address hinted at the strategy the White House intends to employ to push for the spending plan released last week, a return to a more traditional Democratic approach of positioning the party as fighting against the rich and powerful. In Obama's telling, he is taking on entrenched interests in the form of banks, insurance companies, large agribusinesses, oil and gas companies, and others.

Beyond the $3.6 trillion budget for the 2010 fiscal year starting Oct. 1, the president's spending plan outlines a wide array of initiatives for the next several years that collectively could transform American society. Obama wants to extend health coverage to the more than 40 million uninsured, revamp industry so it stops producing so many greenhouse-gas emissions, develop alternative energy sources, and invest billions more in education.

Obama's budget also would impose almost $1 trillion in higher taxes over the next decade on the highest-earning Americans - families making more than $250,000 a year - Wall Street financiers, U.S.-based multinational corporations and oil companies while cutting taxes for lower earners.

"During the campaign, I promised a fair and balanced tax code that would cut taxes for 95 percent of working Americans, roll back the tax breaks for those making over $250,000 a year, and end the tax breaks for corporations that ship our jobs overseas," he said Saturday. "This budget does that."

He also said he will eliminate unnecessary programs and vowed that his administration will go through the federal books "page by page, and line by line" to make cuts.

"This budget also reflects the stark reality of what we've inherited: a trillion-dollar deficit, a financial crisis and a costly recession," Obama said.

Republicans in Congress have said they will be unified in opposition to the tax increases Obama is proposing. Sen. Richard Burr, R-N.C., delivering the weekly Republican address, criticized the spending portion of the plan, as well.

"This week, the president submitted to Congress the single largest increase in federal spending in the history of the United States, while driving the deficit to levels that were once thought impossible," Burr said.

"If we just look at what our debt spending will cost us in interest payments alone, we are talking about $4 trillion over the next 10 years, more than a billion dollars of interest payments every day," he said. "Think of that $4 trillion as a finance charge on your credit-card bill - you have to pay, but you get nothing for it in return."

Obama also promised to substantially trim the skyrocketing federal deficit, projected to reach $1.75 trillion this year by the end of his first term.

The president said the "real and dramatic change" in his plan already has "special interests" gearing up for battle. He said "the insurance industry won't like the idea" that he would force competitive bidding for Medicare coverage and that "banks and big student lenders won't like the idea" of ending subsidies for student loans and that "oil and gas companies won't like" the end of certain tax breaks.

"The system we have now might work for the powerful and well-connected interests that have run Washington for far too long, but I don't," he said. "I work for the American people."

He said the budget plan he presented Thursday will help millions of people, but only if Congress overcomes resistance from deep-pocket lobbies.

"I know these steps won't sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they're gearing up for a fight," Obama said. "My message to them is this: So am I."

A number of his ideas have attracted criticism across party lines. Republicans deride the overall plan as a "job killer" intended to revive class warfare, soak the rich and burden business too much at a time of economic hardship. The plan means "the era of big government is back," as Rep. John Boehner of Ohio, the House Republican leader, put it this week.

Former Gov. Mitt Romney of Massachusetts said at a conference of conservative activists Friday that "I'm afraid I know where the liberal Democrats want to take us." Romney, a former and possibly future Republican presidential candidate, added, "As they try to pull us in the direction of government-dominated Europe, we're going to have to fight as never before to make sure that America stays America."

Certain provisions in Obama's plan may strike special interests, but they also affect favored programs for Democrats as well as Republicans. Sen. Byron Dorgan, D-N.D., for instance, declared that he opposed Obama's proposal to phase out agricultural subsidies for farmers with sales exceeding $500,000 a year.

Democratic Rep. Collin Peterson of Minnesota, the House Agriculture Committee chairman, also criticized the plan. "Now is not the time" to reopen a recently passed farm bill, he said.

Sen. Kent Conrad, another Democrat from North Dakota and the Senate Budget Committee chairman, likewise opposed the farm subsidy plan but said limits on mortgage, charitable contribution and other deductions for high-income earners "may well not survive" and expressed concern about the buildup of debt in the spending blueprint.

"I think we ought to go to work and take the good things in this president's budget, especially the first five years where he cuts the deficit in half," Conrad told CNBC. "But then he kind of gets stuck in the second five years. I think we can do better."

Sen. Arlen Specter of Pennsylvania, one of the stimulus bill's three Republican backers, said it is difficult to see how Obama can meet his new deficit-reduction targets. He called Obama's chief energy proposal "entirely speculative" and urged the president "to forgo the tax increases" in the plan.

The U.S. Chamber of Commerce, which also backed the stimulus bill, said Obama's budget blueprint "appears to move in exactly the wrong direction. More taxes, heavy-handed regulations, and command-and-control government will not hasten recovery. ... You don't build a house by blowing up its foundation."

Obama on Thursday defended his plan: "There are times when you can afford to redecorate your house, and there are times when you have to focus on rebuilding its foundation."

But even as he criticizes special interests, Obama will have his own interest group allies fighting for his plan. The American Federation of State, County and Municipal Employees and a liberal advocacy group called Americans United for Change have produced an advertisement chiding Republicans for opposing Obama's economic stimulus plan. "Tell them America won't take no for an answer anymore," the advertisement says.

Information for this article was contributed by Peter Baker of The New York Times; by Kim Chipman, Holly Rosenkrantz, Laura Litvan and Nicholas Johnston of Bloomberg News; and by Charles Babington and Dina Cappiello of The Associated Press.

Front Section, Pages 1, 8 on 03/01/2009