Obama rallies Democrats to his budget

But they're worried about massive deficit estimates, so even some lawmakers in his own party have their whittling knives out.

J. Scott Applewhite/AP
President Obama, accompanied by Sen. Amy Klobuchar, (D) of Minn. (left) and others, arrives on Capitol Hill Wednesday to discuss his budget with senators.

As House and Senate budget panels marked up FY 2010 budget resolutions today, President Obama headed up to Capitol Hill to rally support for his own $3.66 trillion budget.

"It went great!" the president said, after a closed meeting with Senate Democrats today. The president also met privately with House Democrats.

"It was vintage Obama," added Senate majority leader Harry Reid, after the mid-day meeting. "He made us all feel content, inspired by where we need to go."

But behind the upbeat tone, congressional leaders are working out some tough issues with the new president, and none of it looks easy.

Overall, Democrats are broadly in support of the president's budget priorities. These include: key investments in education, health care, and clean energy, as well as a commitment to cutting the deficit in half.

Deficit projections add a sobering note

But new deficit projections last week by the independent Congressional Budget Office put the White House on the defensive -- and prompted congressional budget leaders to drop elements of the president's budget. The new CBO numbers projected $9.3 trillion in federal budget deficits over the next 10 years -- $2.3 trillion more than the White House had estimated. Unlike the president, congressional leaders opted to present five-year budget outlooks.

"When you lose $2.3 trillion and you are asked to dramatically reduce the deficit -- to get it down to 3 percent of Gross Domestic Product, which we have done -- you've got to do a lot of things," said Sen. Kent Conrad (D) of North Dakota, who chairs the Senate Budget Committee.

The Senate banking panel began a markup of the FY budget resolution today that leaves out elements of the Obama budget. Most notably, House and Senate proposed budgets leave out the president's signature "Making Work Pay" tax cut.

"We had tied the extension of Making Work Pay to revenue from cap and trade. The House and Senate budget resolutions do adopt a different approach," said Peter Orszag, director of the White House Office of Management and Budget in a phone briefing with reporters on Wednesday morning. Cap and trade refers to the plan to reduce the carbon dioxide emissions that cause global warming.

But the stimulus plan signed by the president last month already provides for two years of that tax credit. "So we have two years to figure this out," he added.

Senate budget excludes some of Obama’s priorities

The Senate plan also does not designate specific funding for energy and heath care reform or include a fix for the Alternative Minimum Tax. The president's budget sets aside $634 billion over 10 years as a down payment for health care reform.

"In light of new realities, we have had to insist that things be paid for, and I make no apologies for it," said Senator Conrad. Senate Republicans say they will propose amendments to the budget resolution both in committee and on the floor, but expect to win few votes.

"The budget process requires 51 votes and they have 58, so the chances are very slim," says Sen. Judd Gregg (R) of New Hampshire, the top Republican on the Senate budget panel.

Pressed on whether changes in budget drafts on Capitol Hill marked a significant break with White House priorities, White House press secretary Robert Gibbs said that change is not easy to bring to Washington.

"Would the president like to see a 10-year budget? Would the president like to see disasters fully accounted for? Would the president like to see budgeting that accounts for the possibility of more money to stabilize our financial system? Yeah," he said.

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