As Obama talks, Washington barrels toward budget showdown

In a pair of big-picture economic speeches he delivered Wednesday, President Obama addressed two different audiences -- the public and Congress.

To the public, Mr. Obama relayed his long-term vision for economic growth. To Congress, he issued a challenge: "Stop taking meaningless repeal votes and share your ideas with the country," he said. "Repealing Obamacare and cutting spending is not an economic plan."

In fact, rolling back the president's health care law and continuing to cut spending are two major elements of the Republican agenda, and they have shown no signs of backing down. The president's economic speeches - which wrap up Thursday in Jacksonville, Fla. - do not appear to be changing that dynamic.

On the Senate floor on Wednesday morning, Senate Minority Leader Mitch McConnell, R-Ky., slammed the president for framing the debate over government funding between those who want to "invest" in the nation and those who don't.

"Give me a break. There is a real philosophical debate going on in our country, but it's not anything like how he imagines it," McConnell said. "I'd say it's more of a debate between those who believe in a government that's smarter and more efficient, and some who just seem to believe in government, against all the evidence, between those who draw the obvious lessons from human tragedies in places like Greece and Detroit, and some who just can't face up to the logical endpoints of their own ideology - who can't accept the terrible pain their own ideas inevitably inflict on the weakest in society."

The opposing philosophies driving Democrats and Republicans will come crashing together this fall, when Congress is forced to extend funding for the federal government and increase the nation's borrowing authority - two congressional obligations that in recent years have led to bitter political showdowns. The debate over government funding is exacerbated this fall by the fact that Washington has yet to find a way to "replace" the universally-despised sequestration budget cuts that are set to slash more than $1 trillion over a decade. On top of all that, open enrollment for the Obamacare health care exchanges is set to start this fall, and funding for the new law at this critical juncture gives the GOP one more point of leverage.

On Tuesday, House Speaker John Boehner insisted, "We need significant cuts in spending if we are going to replace the sequester and extend the debt limit. I believe the so-called 'Boehner rule' is the right formula for getting that done."

The "Boehner rule" refers to the GOP demand for spending cuts that equal the dollar amount that the debt ceiling is raised -- it's the rule that created the 2011 debt ceiling showdown. That showdown was resolved with the Budget Control Act -- the law that eventually brought about sequestration.

The White House and congressional Democrats insist there will be no negotiating over the debt ceiling this time around. Some of the speaker's critics have said he's bluffing, but conservatives say that cutting even more spending should remain a priority.

"If President Obama had a magic wand, he might just wish America's debt problem away," Romina Boccia, an expert on federal budget issues at the conservative Heritage Foundation, wrote Wednesday in response to the president's speech. "As it is, however, public debt doubled under his watch, and the nation's debt problem is very real and getting worse."

Yet while Boehner and his fellow Republicans seem more committed than ever to cutting spending, Mr. Obama on Wednesday seemed more inclined than ever to increase spending.

Joseph White, a public policy professor who focuses on budget issues at Case Western Reserve University, pointed out that Mr. Obama's speeches in the past typically mention deficit reduction as part of a responsible, comprehensive economic policy. This speech, however, was focused just on government investments.

"It is a speech that Paul Krugman could've given," White said.

That said, White noted that the context for this speech was very different than past speeches -- under the Budget Control Act, the federal government has already enacted radical spending cuts, and as Mr. Obama noted, the deficit is shrinking.

The issue at hand is extending funding basic government operations, which expires on Sept. 30. Republicans are complicating the debate by roping in negotiations over the Affordable Care Act. Sen. Mike Lee, R-Utah, is leading an effort to block any funding measure that includes any funds that would go towards the implementation of Obamacare.

"I will not vote for a continuing resolution that contains funding for further Obamacare implementation and enforcement," Lee said in a radio interview Friday, adding that 13 or 14 Senate Republicans have signed onto the plan. "I think a corresponding effort is starting to be kicked off in the House. And I expect these numbers to grow steadily as Americans realize the president has said he's not going to implement the law as written. If he's not going to implement the law, we shouldn't be forced to fund it."

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