President Barack Obama abruptly changed course Tuesday and called for governmentwide fiscal restraint, a day after announcing ramped-up federal stimulus spending.
But his push to require all spending to be balanced by equal cuts or tax increases had a broader aim than just reining in a budget deficit expected to quadruple this year. By appealing to fiscally conservative Democrats, Obama was shoring up support for health care reform.
Fiscally conservative Blue Dog Democrats have been pushing Obama on spiraling deficits, and he needs their support on reforming health care.
“We are in a deep fiscal hole,” said Rep. Charlie Melancon, a Louisiana Democrat and co-chairman of the Blue Dog Coalition. “With the right tools, including [pay-as-you-go] budgeting, we can reverse this dangerous trend and begin to put the country back on a fiscally sustainable path.”
The administration has identified $635 billion in spending cuts to help pay for health care reform, which the White House has said will cover about half the total cost. How to cover the balance is an open question and the center of intense debate.
Republicans, in addition to opposing tax increases to pay for health care reform, are strenuously opposing any effort to include a public, government-run health care component.
As Obama slowly reveals his thinking on how best to reform health care, he is giving Republicans more specifics to challenge — and himself more reason to cultivate his own party’s trickier constituencies.
“We saw Washington take over the banks, we saw Washington take over with student loans, we see a Washington takeover with car companies, and now we see an attempt to have a Washington takeover with a government-run health care plan,” said Sen. Lamar Alexander, a Tennessee Republican.
Obama has said he does not want health care reform to increase the federal deficit — which is already setting records and expected to come in at $1.8 trillion this year.
It was unclear whether Congress would put new pay-as-you-go budgeting rules in place to cover health care reform spending.
Lawmakers are already under existing budgetary rules requiring offsets, but they are frequently waived.
Don Wolfensberger, director of the Congress Project at the Woodrow Wilson Center, said rolling out a pay-as-you-go proposal now could help Obama later, particularly if it applies to health care reform.
“His rededication to ensuring any plan is fully paid for through pay-as-you-go budgeting will be needed to keep the Blue Dogs in harness,” Wolfensberger said.
Republicans said Obama’s new fiscal restraint was too little, too late after throwing billions at economic stimulus, mortgage relief, and bailouts for the auto industry and financial sector.
“It’s unfortunate for Americans that President Obama’s newfound [pay-as-you-go] principle arrived after his expensive policies were signed into law,” said Rep. John Culberson, a Texas Republican.
