With Budget Fight Brewing, Obama Defends Economic Recovery Plan
“We will recover from this recession,” the president said in his second primetime news conference from the East Room of the White House. “But it will take time, it will take patience, and it will take an understanding that when we all work together; when each of us looks beyond our own short-term interests to the wider set of obligations we have to each other — that’s when we succeed.”
The president also labeled recent economic growth as “fleeting prosperity”, where the fastest growing part of the economy was the financial industry. He said that the government must now focus on investing in long-term growth.
Beneath the overall optimism about the direction of the economy and the administration’s efforts to stabilize the banking and financial systems, the growing battle over the president’s budget plan was the major focus of his comments and many of the questions.
“At the end of the day, the best way to bring our deficit down in the long run is not with a budget that continues the very same policies that have led to a narrow prosperity and massive debt,” Obama said, taking a thinly veiled swipe at Republican spending priorities under the Bush administration. “It’s with a budget that leads to broad economic growth by moving from an era of borrow and spend to one where we save and invest.”
“This budget is inseparable from this recovery,” he added.
The president made his case as Republican leaders began to galvanize opposition to the massive $3.6 trillion budget Obama put forward in the days after his address to the congress in February. The Obama proposal outlines a bold set of spending initiatives including major investments in health care, education and a major energy policy.
Even before the president spoke with reporters, Senate Minority Leader Mitch McConnell, R-Ky., told reporters “this budget borrows too much.”
“Americans know this budget spends too much, that the spending figures are simply staggering, and that much of that spending is borrowed money,” McConnell said Tuesday morning. “What this means is that in the middle of a recession, when most Americans are rushing to pay down their credit cards, this budget does the exact opposite: it runs up the national credit card to an extent that we have never seen in our nation’s history.”
McConnell added, “There is little or no Republican support for this budget.”
The National Republican Senatorial Campaign Committee also sought to rally support in opposition to the president’s plans.
In an email to supporters that went out even as the president spoke, the committee Executive Director Rob Jesmer wrote, “Candidate Obama promised to take a ‘scalpel’ to wasteful earmarks in the federal budget but President Obama recently signed the pork-laden omnibus bill… President Obama’s actions clearly do not represent the change that he promised Americans on Election Day.”
In discussing the growing chorus of critics who have called the president’s budget proposal irresponsible, Obama challenged them to offer specific plans that address the challenges the country faces.
“Critics tend to criticize, but don’t offer a budget alternative,” he told reporters, saying their plans would also likely lead to huge budget shortfalls five to 10 years out.
As Republican leaders were sharpening their criticism of Obama, senators from the president’s own party were proposing major changes of their own.
Senate Budget Committee Chair Kent Conrad, D-N.D., told the Associated Press Tuesday afternoon that he was planning on scrapping President Obama’s $400 personal tax credit after two years in an effort to reduce the ballooning deficit. By ending the tax credit passed as part of the president’s stimulus plan the projected federal would drop from $1.7 trillion in 2014 to a still major $508 billion.
Before Tuesday’s announcement, Conrad had cautioned the projected deficit would force the Congress to curtail some of Obama’s plans.
“The reality is we are going to have to make adjustments to the president’s budget if we want to keep the deficit on a downward trajectory,” Conrad said last Friday.
In his comments on Tuesday, the president appeared to acknowledge the difficult negotiations ahead.
“When we sent them the budget we did not expect them to Xerox it and vote on it,” Obama said.
In addition to the growing battle over the budget, Obama returned to the ongoing furor over bonuses paid to insurance giant AIG’s employees and his administration’s request for broader regulatory authority over non-banking financial institutions.
“It is exactly because of the lack of this authority” that AIG’s problems threatened to bring down the entire U.S. economy, he said, adding “[I expect] strong support from the American people and the Congress for just that authority.”
During the 56-minute exchange, the president also touched on the new challenges posed by political developments in Israel and among the Palestinians as well as efforts to stabilize the Mexican border and improve relations with Iran. On the domestic side, the president also defended his decision to end the ban on federal funding of embryonic stem cell research and that he was “heartbroken” with the plight of homelessness in the U.S.
Obama will travel to Capitol Hill on Wednesday to meet with Senate Democrats as he seeks to shore up support for the plan and assuage moderate fears of spiraling federal spending.
The press conference also continued the president’s renewed effort to speak directly with the American people where he maintains widespread, if shrinking support. Obama spoke Sunday with the CBS newsmagazine “60 Minutes” and on Thursday he plans to participate in a virtual town hall meeting at Whitehouse.gov.
The president will be taking questions submitted and prioritized by visitors to the site that morning as the Senate Budget committee continues to work out the details of their budget framework.