Sarah Palin says on her Facebook page that the healthcare overhaul passed by the U.S. House of Representatives last week should be “Dead on Arrival” in the U.S. Senate. 

The House-passed bill, which includes a new government health insurance plan, may not be what the Senate passes. But the far-reaching healthcare reform backed by President Barack Obama is far from dead. At least one influential Republican senator believes Congress will enact sweeping legislation.

“I think a bill is going to pass,” said New Hampshire Republican Senator Judd Gregg. In an interview with C-Span’s “Newsmakers” that will air on Sunday, Gregg said Obama has invested too much political capital in his top domestic priority to allow it to fail. Gregg once considered joining the Obama administration, but now has become a major critic of Obama’s proposed healthcare reform and its impact on the country’s mounting debt.

“We’re on an unsustainable path, it is that simple,” Gregg said.

Gregg said he does not see Democrats scaling back the legislation in the face of eye-popping, record deficits.  On the contrary, with Senate Majority Leader Harry Reid struggling to muster the 60 votes needed to pass the bill in the 100-member Senate, Gregg sees “more baggage” being added to it in an effort to win votes.

The bill that initially passes the Senate is not likely to include a new government-run health insurance program, Gregg said. But he said the legislation will likely “move to the left” once Senate and the House negotiators meet to work out their differences and develop a single bill. He said he expects the final bill to include some version of a new public insurance option.

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Photo credit: Reuters/Kevin Lamarque (Senator Judd Gregg in his office)

President Barack Obama has been threatening to crack down on government spending and on Thursday he let the budget ax fall — but gently.
 
He unveiled $17 billion in cuts as part of his administration’s budget for the 2010 fiscal year.
 
“We can no longer afford to spend as if deficits don’t matter and waste is not our problem. We can no longer afford to leave the hard choices for the next budget, the next administration — or the next generation,” Obama said.
 
$17 billion.
 
That would be about one half of one percent of his $3.55 trillion budget.
 
Nearly 1.5 percent of the projected 2010 deficit.
 
And about $1 billion less than what President George W. Bush proposed to cut from the previous year’s budget.
 
By comparison, the American family with a median income of about $51,000 a year looking at a 0.5 percent budget cut would need to trim $255.

Asked to explain the discrepancy between the president’s tough words and his meager cuts, White House spokesman Robert Gibbs said the administration was only just beginning to go through the budget line by line to eliminate waste.
 
“Our budget will bring non-defense discretionary spending to the lowest level as a share of our GDP since we began keeping records in 1962,” he said. “We’ll cut the budget deficit in half in four years and put ourselves — put this country — back on a path toward fiscal sustainability.”
 
The White House then sent round a release from Senator Tom Coburn praising the cuts. Coburn is a notorious Republican budget hawk — and Obama friend — who has repeatedly bottled up legislation in the Senate complaining about its cost.
 
Other Republicans were less charitable.
 
Senate Republican Leader Mitch McConnell called them “modest spending reductions totaling a fraction of a percent of the trillions his budget would add to the debt.”
 
So what are the president’s budget-cutters planning to chop?
 
The educational attache to UNESCO in Paris. Gone. (Let ‘em use teleconferencing, Obama says.)
 
Fixing up the nuclear accelerator building at Los Alamos. Forget about it — the research they do is important for Obama’s energy independence plans, but they can live in the building as it is.
 
The super-duper helicopter that would replace the president’s current fleet — chopped back by about 90 percent.
 
And more.

So what do you think — are the cuts just token? Or has Obama made a real start toward getting a handle on federal spending?
 
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Photo credit: Reuters/Kevin Lamarque (Obama speaks about budget cuts);  Reuters/Jonathan Ernst (Copies of the budget book on display)

For those who are worried about the $1.75 trillion deficit that President Barack Obama projected the government would run in fiscal 2009, wait until you see what the interest on the growing U.S. debt will be.

The U.S. debt is roughly $10.6 trillion and the government spent $253 billion servicing it last year. With the mounting yearly deficits, that cost is skyrocketing.

During the debate over the $787 billion economic stimulus plan aimed at pulling the U.S. economy out of its downward spiral, Republicans argued that the cost was really over $1.1 trillion because of the cost to service the additional debt.

Lest folks think that current low borrowing costs would make the burden a little lighter, Obama’s fiscal 2010 budget projected that during his upcoming four years in office the cost will run roughly $1 trillion.

How does spending $447 billion just in interest payments on the debt in 2013 sound? And $694 billion in 2019 alone? If you want to see those shocking figures in black and white, see page 117 of Obama’s budget. It’s worse than opening your monthly credit card bill and looking at the finance charges on the unpaid balance.

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- Photo credit: Reuters/Jim Young (A government employee looks over a sheet of partially printed U.S. currency.)

 NEW YORK  - As presidential contenders John McCain and Barack Obama sparred over competing tax proposals on Tuesday, their top economic advisers debated similar issues of  what changes in fiscal policy will help boost the U. S. economy.

Taxes took center stage as Doug Holtz-Eakin, senior policy adviser to McCain, and Dan Tarullo, economic adviser to Obama, compared their candidates’ platforms at a Deals & DealMakers executive conference sponsored by The Wall Street Journal.

Their remarks came as their respective Republican and Democrat presidential candidates staked out starkly opposing stances on taxes, with McCain promising corporate tax breaks and Obama pledging tax increases for many.

Obama, in a television interview, said he would increase taxes on the wealthy and on stock profits to pay for a middle-class tax cut of $1,000 a year.  He said he would raise taxes on Americans making $250,000 a year or more and raise the capital gains tax for those in higher income brackets while exempting small investors.

McCain vowed to maintain President George W. Bush’s tax cuts, lower corporate tax rates from 35 percent to 25 percent, allow companies to expense new equipment and technology in their first year and keep capital gains taxes as they are now.

While McCain said he would cut government spending, Democrats argue not enough cuts could be made to pay for his plans, which Obama said would total $300 billion.

Obama thinks it is important “to explain where he would get the revenues to do the things that he thinks need to be done in this country,” Tarullo told the conference.

“Whether you are a person in the middle class or a bond trader, you don’t want to be contemplating a very big corporate tax cut and a very big personal tax cut for upper income people and hoping against past experience that this produces the kind of growth that’s going to more than compensate for a massive federal deficit,” he said.

McCain sees easing tax pressure as a means to promote jobs creation among small businesses, in research and development and on the corporate level, Holtz-Eakin responded.

Hand-in-hand with lower taxes is reining in federal spending, the McCain adviser said.

“He’s committed to changing the culture in Washington so we don’t spend a lot more,” he said. “We actually review programs say no to things that don’t make sense and address the real issues on the spending side, which is where our problems lie.”

“No one has paid attention to what we spend on, and that’s going to change,” he said.

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Photo credit: Reuters/ Lee Celano (McCain); Jason Reed (Obama)