Lawmakers tear into $3.6 trillion budget plan

Some of President Obama's top economic officials got an earful from members of Congress on Tuesday about what troubles them in the president's budget plan:

Spending. Taxes. Deficits. Debt. And the economic forecasts upon which the budget is based.

Republicans did most of the quarreling with Treasury Secretary Timothy Geithner and White House budget director Peter Orszag in separate hearings on the $3.6 trillion proposal, which contains Obama's major health care, energy and education initiatives.

It was left to a moderate Democrat, Rep. Allen Boyd of Florida, to state an even broader concern: that on the heels of $787 billion in economic stimulus and $700 billion in financial rescue funds already approved, Obama might be trying to do too much.

"You need to be careful about taking on too many issues," Boyd warned Orszag at a House Budget Committee hearing, because it "might sink the whole ship."

Orszag and Geithner, who appeared before the House Ways and Means Committee, said much the same thing: They inherited a recession, banking and housing crises and a $1.2 trillion deficit. "What's the alternative," Orszag said, "rather than trying to address these key problems?"

Administration officials will continue to fan out across Capitol Hill this month in an effort to sell key elements of the Obama spending plan as Congress writes its own budget resolution. Details of the administration's plan won't be available until April.

Among the complaints Orszag and Geithner heard Tuesday:

•The budget spends too much. "The numbers in this budget are staggeringly high," said Rep. Paul Ryan, R-Wis. House Budget Committee Chairman John Spratt, D-S.C., noted $634 billion set aside to overhaul the health care system is just a down payment on a final price tag likely to top $1 trillion.

Orszag acknowledged the budget, if adopted, would represent 27% of the nation's economy, the highest level since World War II. Even so, he said, "this budget is not a big-spending budget."

•Tax increases in 2011 could hurt middle-income Americans. Though most are aimed at couples earning $250,000 a year or more, Rep. Dave Camp, R-Mich., said the plan would raise billions from polluters that could be passed along to consumers.

"That means higher prices for Americans for food, for gas, for electricity ... pretty much anything that they buy," Camp said.

•Deficits would remain above $500 billion through 2019, and the debt would double in eight years, from $10 trillion last year to $20 trillion in 2016. "Red ink as far as the eye can see," said Rep. Jeb Hensarling, R-Texas.

Geithner said "there is no alternative" because of the need to respond to the deteriorating economy and financial markets.

•The economic assumptions are rosy. Obama's budget projects that the economy will decline at a lesser rate and rebound more strongly than the Congressional Budget Office predicts.

Orszag defended the forecast because it was made after the two-year stimulus plan was enacted in mid-February, but he acknowledged that the economy has slumped further since then.