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Obama’s Spending Plan Divides Both Parties

Updated: 8:44 a.m.

President Barack Obama sparked divisions in both parties Monday by sending Congress legislation that would grant him new authority to slash spending — a move that drew cheers from fiscal conservatives but sharp rebukes from appropriators reluctant to cede their power of the purse.

The administration’s proposal, the Reduce Unnecessary Spending Act, would allow the president to submit a package of rescissions shortly after a spending bill is passed. Congress would have to consider the recommendations as a package, without amendment, and hold an up-or-down vote within a specified time frame.

Office of Management and Budget Director Peter Orszag said the bill is “not a panacea, but an important tool” for reducing wasteful spending.

At a time of record deficits, the proposal gives Obama something to talk about without actually proposing more cuts before the midterm elections in November. Although the president is not prevented from offering a package of cuts now, Orszag said the administration determined it would not be legislatively viable without fast-track authority requiring votes on the House and Senate floor.

Asked how much Obama is looking to reduce, Orszag used the fiscal 2010 budget as an example. He said the administration proposed roughly $20 billion in cuts to discretionary spending, but only 60 percent of that was passed by Congress. The issue at hand is “calibrating the other 40 percent of what we proposed,” he said.

House Budget Chairman John Spratt (D-S.C.) said he will introduce the administration’s bill this week and called the proposal “a step forward on the path to fiscal responsibility.”

But the president is already facing stiff resistance from key Democrats. And some of his strongest opposition is coming from the last bastion of bipartisanship on the Hill: the Appropriations Committee.

Senate Appropriations Chairman Daniel Inouye slammed Obama’s effort to take more control of spending and said the president already has the power to propose cuts, even though it is rarely used.

“I have long defended the Congressional power of the purse, and as chairman of the Appropriations Committee, I have no intention of ceding that authority to the executive branch, ” the Hawaii Democrat said. “The Congress has never served as a rubber stamp for any administration’s budget request, and I see no reason why we would start doing so now.”

Rep. Jerry Lewis, the ranking member of the House Appropriations Committee, ripped the proposal as an attempt to burnish Obama’s credentials on fiscal responsibility after a spending binge bloated the federal deficit.

“This plan not only intrudes on the constitutional authority of Congress to determine federal spending, but also would have only a minuscule effect on real savings for the American taxpayer,” the California Republican said.

Senate Budget Chairman Kent Conrad pre-emptively blasted the idea two weeks ago, saying the White House already had enough power.

“I think there would come a time when an administration would use that to pressure individual members,” the North Dakota Democrat warned.

Rep. Paul Ryan, the ranking member on the House Budget Committee, brought the idea up to Obama at a bipartisan meeting earlier this year. The Wisconsin Republican said he was encouraged that Obama appeared to be following through, but he also criticized Democrats for failing to produce a budget and said the idea was far from a cure-all.

The proposal “would not apply to the trillions of dollars in entitlement spending driving our looming debt crisis and will only produce savings to the extent the president is willing to use it,” Ryan said.

While House Majority Leader Steny Hoyer (D-Md.) and Senate Majority Leader Harry Reid (D-Nev.) spoke positively of working on the measure, Speaker Nancy Pelosi (D-Calif.) issued a neutral statement and House Rules Chairwoman Louise Slaughter (D-N.Y.) was downright hostile.

“I have very serious concerns about any new proposal that would dramatically reshape the balance of power between the executive and the legislative branches, as this new White House plan calls for. I do not believe that it’s wise for Congress to hand over its constitutionally mandated responsibilities in any situation, but especially not when it comes to appropriations,” Slaughter said.

Some version of the line-item veto has been pushed by every president for decades. A version was enacted in the 1990s and used sparingly by President Bill Clinton before it was struck down by the Supreme Court. Backers have tried to enact a constitutional version since.

Opposition from most Democrats and a smattering of Republicans — particularly Members of the Appropriations Committee — has repeatedly thwarted the idea. They have argued that it tips the balance of power too much to the White House, could be used by a president to exact political retribution and would have little effect on overall spending levels.

Even the fast-track rules, which would bypass Senate filibusters and require a House floor vote, aren’t necessarily foolproof. Pelosi used the Rules Committee to nuke a similar fast-track law for trade agreements. The rule change still required a vote on the House floor, but it left the Colombia free-trade agreement in a drawer.

But at least one group of Democrats is thrilled with Obama’s proposal: fiscally conservative Blue Dogs. “If history is any indication, we know that restoring fiscal discipline to the federal government means putting strong budget enforcement tools in place. Like statutory PAYGO, expedited rescission is one of those tools,” said Rep. Jim Matheson (D-Utah), a Blue Dog co-chairman.

Sen. Russ Feingold (D-Wis.), a co-author of bipartisan legislation similar to the administration’s proposal, will chair a Judiciary subcommittee hearing Wednesday on the issue and take testimony from OMB acting Deputy Director Jeffrey Liebman.

“The administration’s proposal appears to be constitutional and would be a useful tool to help eliminate wasteful spending,” Feingold said.

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