Stimulus Aside, Obama Vows Future Budget Restraint

To a public wary of government spending, President-elect Barack Obama is offering a salve with his massive economic stimulus package: the promise of long-term fiscal discipline.

Budget-conscious lawmakers are pressing Obama to embrace deficit-reduction goals even as he promotes a spending and tax-cutting plan — expected to cost about $775 billion — to jolt the economy out of its downward spiral.

"Part of the discussion that needs to happen right now is not what we do just right now, but what we look to in the future — about how we get back to a balanced budget and then start to deal with this horrible, horrible national debt that we have," said Rep. Dennis Moore of Kansas, a member of the congressional Blue Dogs, a coalition of conservative and moderate Democrats.

Two weeks away from assuming the presidency, Obama vowed Tuesday to "bring a long-overdue sense of responsibility and accountability to Washington" and called the need for budget reform "an absolute necessity."

On Wednesday, he was expected to announce his selection of a chief performance officer, a White House official who will work with federal agencies to set performance standards and hold agency managers accountable for progress.

"The fact that he is making these comments publicly about fiscal responsibility gives me encouragement that we will see something," said Rep. Charlie Melancon of Louisiana, one of the leaders of the Blue Dog Coalition.

With Democrats in control of both chambers in Congress, Obama's reassurances to budget hawks from both parties already appear to be making a stimulus package more palatable. Obama said this week he would like Congress to complete action on an economic recovery plan by the end of the month or the first week of February.

House Speaker Nancy Pelosi, D-Calif., was expected to press fellow Democrats on Wednesday to pass the legislation by mid-February. She, too, has reassurances for cost-conscious lawmakers.

"Many will focus on the upfront cost of this legislation," she was to tell a House Democratic Policy and Steering Committee forum, according to an excerpt of her prepared remarks. "While we are not discussing small sums, focusing on the price tag alone ignores the cost of inaction and the real payoff in terms of job creation and increased revenues to our Treasury."

While promising to fight waste and to make tough budgetary decisions, however, Obama warned that the nation could face trillion-dollar deficits for years to come. Eight years ago, the federal budget ran a surplus; the deficit on Sept. 30 was about $455 billion. That was before the government began spending nearly half of a $700 billion bailout fund for the financial sector.

Obama said Americans will accept his proposed stimulus plan only if they believe the money is being used wisely to boost the troubled economy and to make smart long-term investments in public projects.

Lawmakers and budget watchdog groups want Obama to promptly spell out a process for addressing long-term deficits.

"Short-term stimulus does need to be combined with long-term discipline," said Robert Bixby, the executive director of the Concord Coalition, a nonpartisan group that advocates fiscal restraint. "The deficit numbers are going to be astronomical for the next couple of years. People need to know that there is some end game to this."

Senate Budget Committee Chairman Kent Conrad, D-N.D., agreed that trillion-dollar deficits are likely for a few years and must be tolerated as the government pumps money into the badly weakened economy. But the nation must confront long-term problems facing Social Security and Medicare, he said, which will be "very, very tough."

"It would send a very healthy message to the markets and the American people if President-elect Obama were to simultaneously announce an economic recovery package and the beginning of a bipartisan process to deal with our long-term imbalances," Conrad said.

Obama has not detailed solutions for vexing problems such as growing demands on Social Security and Medicare. His prescriptions to make government accountable could easily run aground, much like those of predecessors who vowed to tackle government waste, fraud and abuse.

But lawmakers are not short on ideas. Conrad and the Budget Committee's top Republican, New Hampshire Sen. Judd Gregg, have proposed a bipartisan fiscal task force of lawmakers and administration officials that would create a plan to reduce budget deficits and lower the national debt.

Blue Dog Democrats would like to see legislation that would force Congress to pay for spending proposals with equal spending cuts or with new revenue. House Democrats this week plan to consider legislation that would require all federal agencies to undergo new audits and would call for congressional hearings when agency inspectors general find evidence of waste or fraud.

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  • by Ron Location: Merritt, NC on Jan 7, 2009 at 12:14 PM
    Economics 101: The way to save the economy is to CUT Capital Gains taxes, CUT Corporate taxes, CUT High Income taxes. In three months time, this economy would do a miraculous recovery. The Democrats won't do any of these things, because everything they do is designed to bring this country to its knees and establish socialism. The traitor Democrats know what steps should be taken that would turn the ecomony around, but they don't want to save this country, they want to destroy it. I fervently hope you voters out there will wake up before it's too late!
  • by Christian Girl Location: Eastern NC on Jan 7, 2009 at 09:24 AM
    I had rather they keep the stimulus money and put that money towards MORE defense. I don't want America to become a sitting duck. Look at Isreal fighting it's just a matter of time again before someone tries to attack America AGAIN!!!
  • by VBush Location: MHCY on Jan 7, 2009 at 04:49 AM
    They will make DEEP CUTS IN DEFENSE. That is what they always do. Watch and see. Defense Research and development will come to a grinding halt. Ship contracts will be canceled. Existing ships will be decommissioned early. F-22 Raptor orders will be cut. Other modern weapon's systems will be eliminated. Troop levels will go down, etc. We will become weak once again, unable to mount any real offensive threat. That is where the lion's share of it will come from. Another healthy portion will come from tax increases. Watch and see.
  • by Mike Location: Edenton on Jan 7, 2009 at 03:02 AM
    Now this will be interesting. Tax cuts, economic stimulus giveaways, and restrained spending from the Liberals who are known for entitlement programs. That does not compute. Where are cuts to be made? Where is the money coming from? Will they be driving the deficit even higher for which they have been blaming the current administration and selling our country out drowning in debt to the Communist Chinese?

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