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Obama faces budget skeptics

sharing dr. seuss: First lady Michelle Obama reads The Cat in the Hat to children of military service members at the Prager Child Development Center in Fort Bragg, N.C., Thursday.

Associated Press

sharing dr. seuss: First lady Michelle Obama reads The Cat in the Hat to children of military service members at the Prager Child Development Center in Fort Bragg, N.C., Thursday.

WASHINGTON — Confronting misgivings in his own party, President Obama mounted a stout defense of his blueprint to overhaul the national economy Thursday, arguing that delay on health care, energy and education would make "recovery more fragile and our future less secure."

The president's wide-ranging proposals in the midst of economic crisis face skepticism from both Democrats and Republicans, as senators question his long-term budget outlook and the deficits it envisions in the middle of the next decade.

Sen. Kent Conrad, the chairman of the Budget Committee, called the track of future deficits "unsustainable" and singled out Obama's proposal for spending $634 billion on health care over the next 10 years.

"Some of us have a real pause about the notion of putting substantially more money into the health care system when we've already got a bloated system," said Conrad, D-N.D.

Treasury Secretary Timothy Geithner, testifying before Conrad's committee, also encountered blunt questions about the administration's plans for shoring up the nation's banks. He reiterated the administration's goal to lay out a private-public partnership to make up to $1 trillion in financing available to help banks clear their books of toxic, mortgage-related assets that have led to a national credit freeze.

Geithner hinted more money might be required beyond the existing $700 billion financial rescue fund. "We certainly can start with the resources we have," he said.

Meanwhile, House Speaker Nancy Pelosi, D-Calif., played down talk that Democrats would consider a second stimulus bill.

"I know that people have made suggestions that we should be ready to do something, but I really would like to see this stimulus package play out," Pelosi said. "It's just not something that, right now, is in the cards," she added later.

The flurry of comments illustrated the complicated moving parts confronting Washington as the economy continues to decline, credit remains clogged and a new president advances broad and expensive initiatives.

The money set aside to address those needs so far has been staggering — $787 billion for an economic stimulus designed to save and create jobs, the $700 billion approved by Congress for the financial rescue package and hundreds of billions more through programs from the Federal Reserve Bank.

On top of that, Obama wants to overhaul health care, reduce greenhouse-gas pollution and undertake major changes in energy policy. He's projecting a federal deficit of $1.75 trillion this year, by far the largest in history, but says he can get it down to $533 billion by 2013.

Use stimulus wisely — or else

President Obama warned anew on Thursday that he will not tolerate wasteful spending of his $787 billion economic stimulus package. "If we see money being misspent, we're going to put a stop to it," Obama told a gathering of state officials. Vice President Joe Biden, who is coordinating oversight of stimulus spending, opened the conference with an equally stern warning. "Six months from now, if the verdict on this effort is that we've wasted the money, we built things that were unnecessary or we've done things that are legal but make no sense, then, folks, don't look for any help from the federal government for a long while," he said.

Obama faces budget skeptics 03/12/09 [Last modified: Monday, November 7, 2011 4:49pm]
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