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With budget to stake, Obama is ready to fight

WASHINGTON – The Obama administration began a vigorous new offensive this weekend to sell its economic program, countering Republicans who call the new budget plan "mind-boggling" in its numbers and ambition.


"I'm ready to fight," President Barack Obama said in his weekly radio talk Saturday, calling for the passage of a plan that would invest heavily in expanded health care, cleaner energy and education, but do so partly through taxes affecting the wealthy and polluters.

"I realize that passing this budget will not be easy," Obama said. He predicted fierce opposition from the insurance industry, oil and gas companies, student lenders and banks, all of which risk losing government subsidies or paying higher taxes if the budget passes. "I know they're gearing up for a fight as we speak," he said. "My message to them is this: So am I."

Top White House advisers elaborated on those comments Sunday, speaking unapologetically about the breadth of the $ 3.6 trillion budget plan and rejecting Republican arguments that it would cost, not create, jobs, and raise energy costs.

Rahm Emanuel, the White House chief of staff, said he was confident the budget would be adopted by April, though he accused Republicans of "scare tactics" in trying to arouse public opposition. Emanuel said on CBS that it was time for the United States to move away from "a culture of rising deficits and more and more consumer spending," and toward one that invests and saves.

Peter Orszag, the White House budget director, said it was wrong to suggest that the administration would be raising taxes at a time of deep recession, because those measures would take effect only in 2011, when the administration presumes the economy will be growing. "We face big problems and we've got to tackle them," he said on ABC.

Still, grim economic indicators continued to pile up in recent days. The US economy contracted by 6.2 percent in the final quarter of last year, a performance one economist called a “ghastly” predictor of may become the deepest recession since World War II; unemployment claims reached an all-time high of 5.1 million in mid-February. General Electric, long an economic mainstay, cut its quarterly dividend for the first time in 71 years; and high-profile investor Warren Buffett judged that the economy "will be in shambles throughout 2009 – and, for that matter, probably well beyond."

A major legislative fight over the budget is certain. Republicans expressed shock at the size and radical change implied by some Obama proposals, even if some conservatives appeared to quietly relish the issue as a rallying point useful as they try to orchestrate their political recovery.

"I think it's terrifying in the policy implications as well as mind-boggling in the numbers," Senator Jon Kyl, Republican of Arizona and a Finance Committee member, said on the Fox network. "You're directly punishing job creation with this kind of huge tax policy." Representative Paul Ryan, Republican of Wisconsin, called the $ 3.6 trillion budget proposal "breathtaking."

"What surprises me most about this budget is that they would bring it out in the middle of a recession," said Ryan, who serves on both the Budget and Ways and Means Committees. The proposed fee for manufacturers who pollute would amount to an energy tax on everyone, he said on Fox.

But Kyl and Ryan said it would be hard for Republicans to block the budget.

"I hope that we can, but that means that all of us will have to be together on this," Kyl said. "We have to be absolutely united."

This would be especially true if the majority Democrats employed a parliamentary maneuver that required only 51 votes in the Senate for passage of budget legislation, not the usual 60.

Democrats control 58 seats in that chamber. The Republicans' best hope is that some conservative Democrats – uneasy over cuts in agricultural subsidies, or a drop in the amount the wealthy can deduct for charitable contributions – might join them.

"You can not stop this in the House," Ryan said. "If you can get a few Democrats to turn then I think you can slow this thing down." Representative Eric Cantor of Virginia, the second-ranking Republican in the House, said the budget would impose a stifling effect on small-business owners.

Emanuel said Sunday that the Obama administration wanted to "continue to reach out" to Republicans, even though only three congressional Republicans supported Obama's stimulus plan. But when asked on CBS about who could have spoken for the Republican Party, he offered a view that might surprise many mainstream Republicans.

"It was Rush Limbaugh," he said, referring to the conservative talk-show host. "He is the voice and the intellectual force and energy behind the Republican Party. And he has been upfront about what he views. ”

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