Tales from the Trail

Obama lets the budget ax fall — but gently

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.
 
OBAMA/BUDGET“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.
 OBAMA/BUDGET
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?
 
For more Reuters political news, click here.

Photo credit: Reuters/Kevin Lamarque (Obama speaks about budget cuts);  Reuters/Jonathan Ernst (Copies of the budget book on display)

The First Draft: Details

OBAMA/The devil’s in the details, the saying goes, and we’ll find out plenty of details today about two big initiatives of the Obama administration: the budget and the bank bailout.

At 10:35 a.m., Obama will propose slashing $17 billion from the U.S. budget in 121 programs ranging from weapons systems to mine cleanup. Republicans are likely to say that’s not enough to tame his $3.55 trillion budget.

At 5 p.m., the Treasury Department will reveal the results of its “stress tests” of major banks, and is expected to say that about half of the 19 largest banks will need to raise more money to stay financially should.

Republicans seek dough to help defeat Specter after his defection

Reaction among Republicans to Senator Arlen Specter’s decision to defect to the Democratic party ranged from somber disappointment to outrage, and now the Republican National Committee hopes to capitalize on that anger.

USA/RNC Chairman Michael Steele sent an e-mail to supporters expressing his outrage and disbelief that Specter was blaming his fellow Republicans for leaving. He beseeched party members to send in donations to help defeat Specter in the 2010 election.

“He simply believes he has a better chance of saving his political hide and his job as a Democrat,” Steele said in the e-mail. ”He loves the title of senator more than he loves the party — and the principles — that elected him and nurtured him.”

U.S. Senate goes two ways on estate taxes

The U.S. Senate went two different ways on the estate tax, which has been a contentious issue for years — a tax congressional Republicans have villified as the “death tax”.BRITAIN-RICHARDSON/

Senators voted 51-48 to include a provision in the fiscal 2010 budget that called for exempting estates at $5 million for individuals and limiting the tax to 35 percent — though the measure is non-binding and could be stripped out when the legislation is melded with a separate budget that passed the House of Representatives.

The amendment provoked a moment of drama in an otherwise long day of voting in the Senate where Democratic leaders scrambled to find the votes to kill the amendment, which scores some political points to those who have rallied against the estate tax for years.

White House pulls trigger early on budget praise

G20/As the U.S. House of Representatives and Senate drew closer to wrapping up votes on their version of the fiscal 2010 budget, President Barack Obama’s staff appeared to pull the trigger a bit hastily on his congratulatory statements praising the Senate vote.

At 7:50 p.m. EDT, about 40 minutes after the House of Representatives approved its budget plan that trims Obama’s $3.55 trillion budget proposal, the White House issued a statement from Obama praising the vote as “another step toward rebuilding our struggling economy.”

But appended to the bottom was another statement from Obama — who probably was asleep since he’s in London — that looked like the statement the White House planned to issue after the Senate votes on its own budget plan:

Obama chief of staff visits Congressional friends

As the Democratic-controlled House Budget Committee considered dozens of Republican amendments on the 2010 budget Wednesday night, an old friend of many lawmakers — and an enemy to a few — dropped by to say hello, catching many by surprise. 

USA/

President Barack Obama’s chief of staff, Rahm Emanuel, the former Chicago congressman known for his brusque style, walked into the committee room nine hours after it started and took a seat on the edge of the dais to chat with fellow Democrats as they worked on Obama’s $3.55 trillion budget proposal.

Republicans and even some Democrats have expressed concerns about the deficits the proposed budget could produce. Obama earlier on Wednesday met with Senate Democrats to try to convince wavering lawmakers to support his budget priorities.

Mod Squad infiltrates U.S. Senate budget fight

Their mission is to handcuff some of the money President Barack Obama seeks in his budget request to Congress … deficit-spending that they fear will prey on future generations.

They are the “Mod Squad,” a group of about 15 Senate Democrats, some of them freshmen, whose tentative name reflects their moderate political leanings and is borrowed from a 1960s television drama.

USA-STIMULUS/“The purpose is not to be adversarial to the White House,” ringleader Ben Nelson of Nebraska told reporters on Thursday. Yes, it’s the very same Nelson who helped broker the compromise on the $787 billion economic stimulus bill.

The First Draft: Downtown Gordon Brown

That Gordon Brown, he won’t leave town. The British Prime Minister speaks to Congress at 11 a.m., where he is expected to urge lawmakers to steer clear of protectionism. OBAMA-BRITAIN/

There’s lots more happening on Capitol Hill today.

The Senate Judiciary Committee at 10:00 considers a “truth commission” that would examine the Bush administration.

At 2:30, the IRS testifies to the Senate Investigations subcommittee about its effort to force Swiss bank UBS to disclose the names of its well-heeled clients who may be hiding assets to avoid paying taxes.

Barack Obama’s “bring ‘em on” moment?

President Barack Obama came precariously close to having a “bring ‘em on” moment Saturday.
 
Back in 2003, when U.S. forces were struggling to establish order in Iraq, President George W. Bush USA-OBAMA/was roundly pilloried when he taunted militants plotting attacks on American troops to “bring ‘em on.”
 
Obama, trying to push his first budget through Congress, is not feuding with Iraqi militants — he’s got his own axis of evil.
 
They are the powerful lobbyists and wealthy special interests who drive up healthcare costs, sponge off federal education loan money and soak up other government subsidies and tax breaks.

Obama says they are spoiling for a showdown over his plan to squeeze their funding out of his $3.55 trillion budget.
 
“I know they’re gearing up for a fight as we speak,” Obama said in his radio address.
 
“My message to them is this: So am I.”


2/28/09: Your Weekly Address from White House on Vimeo.

For more Reuters political news, please click here.

Photo credit: Reuters/Jim Young (Obama speaks to Marines at Camp Lejeune Friday)

The First Draft: Drawdown in Iraq

President Obama makes no small plans. One day after announcing the biggest budget deficit since World War Two, Obama flies to a Marine base in North Carolina to announce a withdrawal timetable for troops in Iraq. IRAQ/

Obama envisions an end to combat operations by August 2010, though a force of around 50,000 will remain. That’s too many for House Speaker Nancy Pelosi, a fellow Democrat, but former Republican presidential rival John McCain thinks it’s about right.

The Iraq news should provide a welcome change of focus from the economy, which continues to be terrible. Government data showed the U.S. economy contracted more sharply than estimated in the fourth quarter, with gross domestic product falling at an annual rate of 6.2 percent. The Treasury Department has said it will convert its $25 billion stake in Citigroup to regular shares, giving it 36 percent ownership of the troubled banking giant. Citi’s shares are down 19 percent in premarket trading.