Obama Tries To Sell Dems On Budget

President Barack Obama took his sales pitch to the Capitol Wednesday, urging moderates in his party to get behind the most ambitious spending plan in a generation, but Budget Chairman Kent Conrad isn’t budging on Obama’s signature middle class tax cuts. 

Conrad’s budget assumes the $800 per family tax cut would be phased out unless they are offset with spending cuts. 

"If they are to be extended, they would have to be offset," the North Dakota Democrat told reporters in the Capitol shortly after Obama left the building.

Obama’s visit was his first with the Senate since Inauguration, and he sought to unify disparate factions of his caucus — especially budget hawks — who have increasingly raised concerns about the size and scope of his budget. White House budget director Peter Orszag on Wednesday morning sought to play down the differences between moderate congressional Democrats and the White House, insisting that they are all on the same page, even though Conrad wants to cut in half the Obama spending increase.

Obama headed into the lunch around 1:10 p.m., smiled and pointed to a crowd gathered outside a conference room but didn't say anything to reporters. He left about 45 minutes later without making public comments.

Obama's meeting came as the House and Senate budget committees each began drafting blueprints for the coming fiscal year, and each made significant changes to the $3.6 trillion, 10-year plan that Obama proposed last month.

Despite his sales pitch Tuesday, still has a hard sell for moderates like Sen. Ben Nelson (D-Neb.).

"I truly believe we're going to have to reduce the spending levels significantly," Nelson said. "Meaning we're going to have to shift, create a continuum for a lot of the goals and priorities for more than one budget. Ultimately, he'll have to tell us, OMB will have to tell us ... how that can happen."

Conrad also has not provided a specific down payment to meet the $634 billion health care reserve fund that Obama outlined in his budget.

Conrad proposes keeping Pell Grant funding on the discretionary side, rather than the more expensive mandatory proposal sought by the president, and he would slice by $608 billion the spending and tax proposals in Obama’s budget.

Orszag, in a conference call on Wednesday morning, insisted that congressional budget proposals were “98 percent” the same as the White House budget.

“They are not identical twins … but they are certainly brothers that look an awful lot alike,” Orszag told reporters.

At the same time, the administration says it would look for other ways to generate revenue by trying to narrow the $300 billion in annual uncollected tax revenues.

Obama has asked former Federal Reserve Chairman Paul Volcker to convene a task force to study the “tax gap” and report back to him with recommendations by Dec. 4, Orszag said.

Orszag said the “only constraint” for the task force is to not propose a tax increase in 2009 and 2010, and to ensure there are no recommendations to raise taxes for families making under $250,000 a year.

Orszag also says the administration has not given up on the idea of budget reconciliation, a process that calls on legislative committees to draft bills to achieve a specified level of savings outlined in the budget resolution.

The idea of using this process to advance Obama’s agenda on health care, education and other issues is enticing for Democratic leaders because reconciliation bills cannot be filibustered, meaning that just 51 votes are required for passage, rather than 60. Conrad has kept the language out of his budget resolution, while Spratt includes reconciliation provisions in his proposals.

Republicans say that they would view such a move as legislative war, but the White House is keeping the option open.

“Reconciliation is not where we&rsqo;d like to start, but we are not willing to take it off the table,” Orszag said Wednesday. “There clearly are some differences between the Senate and House on this topic. … That is something that will be worked out in conference.”

At the same time, Orszag insisted that even if Congress approves a budget resolution silent on the health care reserve fund, “it’s not particularly relevant,” since the authorizing committees in the Senate are working on legislation that mirrors what the president is proposing.