Administration officials signal White House might accept cuts to proposed budget as long as health care reform, other priorities are preserved

Obama administration officials have indicated they might be willing to accept reductions to President Obama's budget proposal as long as his "signature initiatives," including health care reform, remain untouched, the Washington Post reports.

After traveling around the country to garner support for his $3.6 trillion fiscal year 2010 budget proposal, this week Obama will "try to persuade skeptical Senate Democrats to support" the budget despite a recent Congressional Budget Office report indicating that the proposal would result in the U.S. borrowing $9.3 trillion over the next decade.

The House Budget Committee and Senate Budget Committee this week will vote on their respective budget resolutions, with the full chambers expected to consider the blueprints next week. Differences between the two versions would be reconciled over the spring recess (Montgomery, Washington Post, 3/24). According to CQ Today, congressional Democrats "will almost certainly have to cut some of the administration's discretionary spending request" in order to "paint a better deficit picture" (Clarke, CQ Today, 3/23). Despite the deficit news, "party leaders are sticking with Obama's budget agenda," the AP/Boston Globe reports. House Budget Committee Chair John Spratt (D-S.C.) said, "We're trying to track as much as we can the president's budget" (Taylor, AP/Boston Globe, 3/23).

Budget Reconciliation Process

CQ Today reports that the "thorniest issue in the budget" is whether Democrats will use the filibuster-proof budget reconciliation process to move Obama's health care reform proposal (CQ Today, 3/23). Democrats' efforts to include reconciliation in the budget for health care and other initiatives "now appear on life support," Roll Call reports (Dennis, Roll Call, 3/23). Republicans have said that including reconciliation provisions in the budget "would end any chance of there being a bipartisan health care bill," CQ Today reports (CQ Today, 3/23).

Some senators, including Senate Budget Committee Chair Kent Conrad (D-N.D.) and Senate Finance Committee Chair Max Baucus (D-Mont.), "say that any health care measure must be bipartisan if it is to have lasting durability," the AP/Globe reports (AP/Boston Globe, 3/23). Sen. Tom Carper (D-Del.) on Monday added that Democrats could do "serious damage to our bipartisan effort" if they start talking "in earnest about putting (health care reform) in reconciliation" (Raju/Martin, Politico, 3/24).

Conrad on Sunday during an appearance on CBS' "Face the Nation" said that he will not include reconciliation in his budget proposal for either health care or climate initiatives, as the budget reconciliation process should be reserved for deficit reduction (Roll Call, 3/23). However, House leaders have yet to decide whether to include such provisions in their version (CQ Today, 3/23). Obama administration officials have "cautioned that ... Obama's preference is not to pursue reconciliation -- but that the White House is open to the technique if necessary to move priorities like health care," Politico reports (Politico, 3/24).

Health Reform Legislation Unlikely To Be Budget-Neutral

Democrats writing health care reform legislation "are not echoing" Obama's promises that a health care overhaul will be fully funded, which could "tie even more knots into what is sure to be a contentious battle," The Hill reports. White House Office of Management and Budget Director Peter Orszag on Friday said, "Our approach here is a deficit-neutral one for health reform," adding, "The health reform package has to be deficit-neutral over the next five to 10 years."

However, The Hill reports that "there are signs ahead" that the committee chairs who will write the legislation will overcome the desires of fiscally conservative House Blue Dog Coalition and create a plan that could add to the deficit. Rep. Allen Boyd (D-Fla.), chair of the Blue Dogs' budget task force, said it's still a "good question" whether lawmakers drafting health care overhaul legislation are as committed as Obama to a deficit-neutral plan. He added that because Obama included deficit-neutral measures for the overhaul in his proposal, he expects Conrad and Spratt to follow suit. However, that "appears unlikely," according to The Hill. Lawmakers have opted to forgo pay-go rules on other health care matters, such as a Medicare payment system for physicians.

The Hill reports that the Blue Dogs "have not yet indicated whether a deficit-positive health care plan is a complete non-starter for them." However, they are "in a tough spot" because "[i]f they embrace health reform that doesn't comply with pay-go, they will be accused of caving on their No. 1 issue." Some Republicans have said that a deficit-based reform plan is not an option. Senate Finance Committee ranking member Chuck Grassley (R-Iowa) said, "I think it's a consensus among (Senate Republicans) that it's got to be paid for," and "that partly is driven by what Democrats have done in the previous Congress with pay-go. It's our reminding them of a principle that they laid out, and they ought to live by the principle" (Allen/Young, The Hill, 3/23).

Editorial

"A major problem with the Obama budget is that it focuses on a number of costly administration legislative priorities" -- including a health care overhaul -- "whose timing should be questioned" because of the economic recession, a Washington Times editorial states. The editorial continues that although Obama has "said his administration was looking line by line through the budget for areas to cut spending, this is typically promised by new administrations and the execution is often shaky at best." The editorial concludes, "Despite President Obama and Democratic leaders' talk of fiscal conservatism, there is little sign that Congress and the White House are truly reversing years of Bush administration spending increases built on the idea that deficits don't matter," adding, "We hope to be proven wrong but ... we're not holding our breath" (Washington Times, 3/24).