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Budget czar downplays differences between Congress and Obama

By Dave Cook / March 25, 2009



With President Barack Obama’s budget proposals being criticized even by members of his own party, Office of Management and Budget Director Peter Orszag sought to minimize differences with House and Senate budget blueprints saying the documents were, if not identical twins, at least “brothers that look a lot alike.”

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The president is slated to meet later in the day with members of the Senate Democratic Caucus, and criticism of his budget was on subject at the president’s prime time press conference Tuesday evening. Both House and Senate budget panels begin work on the federal budget for 2010 today.

Focus on the similarities

Initial House and Senate budget drafts are “fully in line with the president’s key proposals,” Orszag said on a conference call with reporters. “The big story is how similar these things are.”

After the Obama administration released its budget, the nonpartisan Congressional Budget Office, which Orszag used to lead, released an estimate saying the Obama spending plan would produce $9.3 trillion in red ink over the next ten years, more than OMB had projected.

Trimming Obama's plan

As a result of the worsening deficit estimates, the Democrats who head the Senate and House budget committees have both scaled back Obama’s requests for domestic items.  For example, Senate Budget Committee Chairman Kent Conrad of North Dakota has proposed making Obama’s “Making Work Pay” tax cut expire at the end of two years. 

Neither the House nor the Senate budget drafts include revenue from auctioning permits to emit greenhouse gases, a key element of Obama's budget. Orszag said the president’s environmental plan might be easier to pass outside the budget.

Small fractions of big dollars

“Clearly there were some adjustments” between the administration’s budget plans and the blueprints from congressional budget chairmen, Orszag said.  He put the differences at 6/10ths of one percent in the House and 1.2 percent in the Senate.  Of course, even small fractions of a proposed $3.6 trillion budget add up to big dollars.

Speaking of big dollars, Orszag spoke with enthusiasm about a panel to be led by former Federal Reserve Board Chairman Paul Volcker that will study the federal tax system and spell out areas for reform. Orszag said the tax gap -- the difference between what Americans owe in taxes and what they pay -- is $300 billion.  He added that that estimate may be “too low.” The reforms could be used to raise revenue.