Obama Promotes Fiscal Restraint, Big Spending

President-elect Barack Obama wants to project fiscal restraint even as his economic team assembles a massive recovery package that could cost several hundred billion dollars.

A day after introducing the captains of his economic team and promoting a giant jobs plan, Obama on Tuesday was to lay out his budget belt-tightening vision. The dual images — big spender and disciplined budget watcher — were designed to give both political and economic assurances to the public, the Congress and the financial markets.

Obama also was expected to introduce Peter Orszag as his new director of the Office of Management and Budget, the White House office that serves as a funnel for federal agency budget requests. Orszag is the current director of the Congressional Budget Office.

Obama's economic team embodies what at first glance seem to be mutually exclusive goals. Timothy Geithner, Obama's choice for treasury secretary; Lawrence Summers, who will head the National Economic Council; and Orszag all have links to Robert Rubin, who as President Clinton's treasury secretary pushed for a balanced budget.

But all three will also be part of an administration that will drive deficits to new heights with an economic plan designed to save or create 2.5 million jobs and redirect the economy over the next two years. Economists from across the political spectrum, including some who have served as informal advisers to Obama, have put the size of an economic recovery package as high as $700 billion over two years.

Obama summed up the challenge Monday.

"The way to think about it is short term, we've got to focus on boosting the economy and creating 2.5 million jobs, but part and parcel of that is a plan for a sustainable fiscal situation long-term, and that's going to require some reforms in Washington," he said during a news conference in Chicago to introduce Geithner and Summers.

"To make the investments we need," he said at another point, "we'll have to scour our federal budget, line by line, and make meaningful cuts and sacrifices, as well, something I'll be discussing further tomorrow."

Obama is already starting in the red. The federal government reported a record deficit of $237.2 billion in October, which reflected only a portion of the $700 billion Congress approved last month to rescue the financial markets. The government's red ink has been rising over the past eight years, reversing a surplus achieved during the Clinton administration.

Leonard Burman, director of the nonpartisan Tax Policy Center, said Geithner and Summers reflect both the need for a large-scale stimulus to the economy and for fiscal restraint once the economy shows signs of improvement.

"What's good about the appointments that Obama has made is that it suggests, in ways that his campaign never did, that he really understands this," Burman said.

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  • by Devil Dog Location: New Bern on Nov 25, 2008 at 03:44 PM
    To Obama Snake Oil Co....When OBAMA said "Everyone will be required to work", it's a term they are not familiar with. They lend nothing to constructive dialogue.
  • by Obama Snake Oil Co Location: Washington on Nov 25, 2008 at 01:04 PM
    "Where have all the liberals gone....gone to get koolllllllaide". Devil Dog, where is lil woman, melissa and lavon? I guess they are done campaining for the messiah. Now they are waiting for the change Obama will bring. After taxes, its about $.11 cents.
  • by ??? Location: NC on Nov 25, 2008 at 12:29 PM
    WITN, what happened on my first post.Did telling the truth hurt too many black peoples feelings.If this isnt biased I will kiss your (You know what).
  • by Dwayne Location: Greenville on Nov 25, 2008 at 10:58 AM
    The title itself is an oxymoron.
  • by Obama Snake Oil Co Location: Washington on Nov 25, 2008 at 10:22 AM
    He needs to create 2.5 million jobs for who? Now all of the illegals will have state jobs redoing all the bridges and roads. Weeelll, isn't that special. I am so glad new crossing illegals will have jobs. Gosh, that Obama is a smart one. I am sure he is going to help me with my money. I hear we will be pumping wind and solar in our tanks of our "existing" cars by next year. I guess it uses some sort of "hot air" to do this with. Oh, he doesn't want drilling by the way. See ya in the gas lines to by $7 gallon gas. Finger pointing is not what I would call this, most of the time the finger is pointed toward someone not at them.
  • by huckfan on Nov 25, 2008 at 09:10 AM
    Fair tax system would fix most of the problems we face today. Create new base of taxpayers (undergrould money taxed). Encourage investing by doing away with capital gains taxes. Bring money back to USA that is sitting in offshore accounts because of the current tax system. We ALL would have more disposable income to help the economy grow and the benefits would help dramatically for the short term and would be the fix for the long term. Todays propsals are no more than band aides and we will be right back in the mess we are currently in.Imagine making 1000.00 a week and bring home your whole check and you deciding how much taxes you pay. Check out the facts at fairtax.org
  • by Devil Dog Location: New Bern on Nov 25, 2008 at 07:57 AM
    The TARP money should have been used by the government to buy every home in foreclosure. Bulldoze the homes and now you have empty lots. This would take the supply of existing homes off the market, and create a demand in the homebuilding industry. This would generate millions of jobs, since new homes/apts would be needed to support the demand. Durable goods sold by stores to furnish the homes/apts would boom. The government would get the cost of the lot in return. This would be cheaper than $7.4 trillion dollars we are on the hook for now. Go back to 15-20 and 30 year mortgages with 20% down at 7% interest rate. That would solve the housing crisis.
  • by Blog Refuter Location: NC on Nov 25, 2008 at 07:42 AM
    Well, it must get worse before it gets better. As President-elect Obama said, "There is no quick and easy fix to this economy." We are in a war that has cost us well over a half-trillion dollars already, and the cost is rising exponentially each second, even as we speak. And still, we have not caught the main perpetrator behind 9-11. Yes, we got rid of Saddam. Thank God for blessing the Iraqi people. Our soldiers have unselfishly given of themselves to the cause of saving lives; for this, they should be commended. Also, I applaud all American taxpayers. You have faithfully supported this war and looked beyond the Iraqi's religion (Islam) in order to protect the sanctity of life. If we can sacrifice our tax dollars to support the Iraqi government, can we not also sacrifice our tax dollars to improve the American economy? A blindly led nation is only seeking destruction. I say yes to change! I say yes to a stronger economy! And I say yes to a united nation under God! Long Live America!
  • by Jimbo Location: NC on Nov 25, 2008 at 05:26 AM
    Only a complete idiot wouldn't have seen this coming. I have said all along "hold on to your wallet." I will be shaking my finger with Mike.
  • by Cat Location: Gboro on Nov 25, 2008 at 05:01 AM
    Amen, Mike.
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