With caveats, president flexible on budget

President Obama told Democratic senators on Wednesday that he is open to changes to his budget plan as long as they address his top priorities of healthcare, energy, education and deficit reduction.

Hours after House and Senate budget writers unveiled their own proposals, Obama told the Senate Democratic Conference in a closed-door meeting that he is not opposed to adjustments to his $3.55 trillion proposal, senators said. Obama spoke for only a few minutes in the Capitol, telling his former colleagues that he understood his budget wasn’t universally popular while also asking them to preserve his “core principles,” the lawmakers said.

{mosads}“It was vintage Obama,” said Senate Majority Leader Harry Reid (D-Nev.). “He made us all feel content and inspired by where we need to go.”

The calls for unity by Democratic leaders heartened centrist Democratic senators who have been critical of the spending and the size of deficits that would result from the president’s proposals.

“He said this was a cooperative process, that he understands changes will be made and he never expected us to rubberstamp it and adopt it without changes,” said Sen. Evan Bayh (D-Ind.), one of the leaders of a group of 15 centrist senators concerned with the president’s plan. “He knows this is a collaborative process and he fully expects members of the Senate to come forward with their ideas.”

Obama made only one public comment to reporters — “It was great,” he said.

The president’s message came on the same day that Senate Budget Committee Chairman Kent Conrad (D-N.D.) and House Budget Committee Chairman John Spratt (D-S.C.) spelled out their budget resolutions. Both plans include less spending and fewer details than Obama’s plan.

While Obama’s budget calls for a $540 billion increase in non-defense discretionary spending next year, Spratt’s calls for a $533 billion increase and Conrad’s seeks a $525 billion increase. Both Spratt and Conrad have been critical of the size of future deficits projected by Obama’s budget.

The nonpartisan Congressional Budget Office (CBO) estimated that the president’s plan would lead to deficits of at least 4 percent of gross domestic product annually from 2013 onward. Spratt’s budget would lead to deficits of about 3.5 percent while Conrad’s plan would lead to deficits of 3 percent, according to the CBO.

One aspect of Spratt’s budget blueprint that’s already drawing ire from the upper chamber is its inclusion of reconciliation instructions for healthcare reform. While Conrad’s plan does not call for reconciliation, Republicans fear that the final House-Senate budget measure will.

That would mean that only 51 votes, instead of the traditional 60, would be needed to pass healthcare reform in the Senate.

Sen. Judd Gregg (R-N.H.) charged House Democrats with trying to rewrite the rules of the Senate.
“The only reason [reconciliation is] in the House is so they can be jammed through the Senate in a conference report,” Gregg said. “That’s a terrible thing to do to the tradition and the status of the Senate.”

Reconciliation protections for climate change legislation were not included in the Conrad or Spratt budgets.
Both congressional spending plans fail to extend Obama’s signature middle-class tax cut beyond fiscal 2011. The vehicle that would have paid for the tax cut, a cap-and-trade carbon emissions system, was also left out of both congressional budget plans. Instead of the cap-and-trade system, which Obama sought to wean the country off foreign oil and curb climate change, Spratt and Conrad are calling for a new reserve fund to achieve the same goals without strict limits on carbon emissions.

The congressional budgets also preserve the president’s proposed “reserve fund” for healthcare reform. But neither Conrad nor Spratt indicated how big the fund would be or how they would pay for it. Obama pegged his fund at $646 billion, calling it a “down payment” on healthcare changes and paying for it largely by limiting itemized tax deductions for the wealthy.

Conrad and Spratt said that the allocation for healthcare reform wouldn’t add to the deficit, but they left the details on how they would be paid for to the committees that will be crafting the bill.

Conrad said he believed his plan accomplishes what Obama asked lawmakers to do on Wednesday.

“He asked the caucus what he has asked me: ‘Preserve my priorities — education, energy, healthcare, reduce the deficit substantially and leave maximum flexibility to the committees of jurisdiction,’ ” said Conrad, who said two weeks ago that the president’s initial plan didn’t have enough votes to win passage.

Still, it’s unclear whether the adjusted plans in the House and Senate will win approval.

Spratt told reporters that his budget tries to reflect the concerns of fiscally conservative Blue Dog Democrats over spending. But asked if he thought the new budget plan would be enough to win their votes, Spratt responded, “We hope.”

Rep. Allen Boyd (D-Fla.), a senior Blue Dog who sits on the House Budget Committee, had yet to take his budget plan to the rest of the centrist group, Spratt noted.

Boyd said Spratt’s budget resolution was a “good document,” but he added that more changes may have to be made in the future. Getting enough votes for the budget will be “difficult,” he said.

“Eventually, I think President Obama is going to have to come up with some more recommendations about what he wants to do about Iraq and defense spending,” which, along with entitlements, make up the lion’s share of the long-term budget challenges, Boyd said.

While Democrats will likely lose some fiscally conservative Democrats, Republicans were prepared to hold firm in opposition.

On Tuesday, House Majority Leader Steny Hoyer (D-Md.) predicted a party-line vote.

“The budget really isn’t a bipartisan document, whoever is in charge,” Hoyer said. “And rarely does that, therefore, prejudge whether or not, in the carrying-out of the budget, you are going to get bipartisan support.”

Last year, the House passed its budget resolution 212-207, with every voting Republican rejecting it as well as 16 Democrats voting no. The final House-Senate budget passed 214-210 with no GOP support. Passing the budget should be a bit easier this year because of bolstered Democratic majorities in both chambers.

Republicans, meanwhile, are reaching out to fiscal conservatives in the Democratic Caucus.

During the House Budget Committee markup on Wednesday, Rep. Jeb Hensarling (R-Texas) implored the Blue Dogs to “not just soul-search on this budget, but ask yourself if this is something you can really support.”

The markup was still ongoing at press time.

J. Taylor Rushing and Sam Youngman contributed to this article.