Moderate Dems Choke On Obama Spending

Moderate and conservative Democrats in the Senate are starting to choke over the massive spending and tax increases in President Barack Obama’s budget plans and have begun plotting to increase their influence over the agenda of a president who is turning out to be much more liberal than they are.

A group of 14 Senate Democrats and one independent huddled behind closed doors on Tuesday, discussing how centrists in that chamber can assert more leverage on the major policy debates that will dominate this Congress.

Afterward, some in attendance made plain that they are getting jitters over the cost and expansive reach of Obama’s $3.6 trillion budget proposal.

Asked when he’d reach his breaking point, Nebraska Sen. Ben Nelson, one of the most conservative Democrats in the Senate, said: “Right now. I’m concerned about the amount that’s being offered in [Obama’s] budget.”

Another attendee, Sen. Mary L. Landrieu (D-La.), said she expected the newly formed caucus to shape Obama’s budget proposal as it moves through Congress.

“We want to give the president a chance, but our concern is going to be on the budget, looking forward,” Landrieu said. She added that she agrees with Obama that there needs to be “fundamental change” in fiscal policy, but she said “we do have to keep our eye on the long term, on intermediate and long-term fiscal responsibility.”

Sen. Evan Bayh, the Indiana Democrat who assembled Tuesday’s skull session, added that he was “very concerned” about Washington’s level of spending, especially in a $410 billion “omnibus” spending bill to fund the government until the start of a new fiscal year in October.

As for the tax increases on high-income earners called for in Obama’s plan, Bayh said, “I do think that before we raise revenue, we first should look to see if there are ways we can cut back on spending.”

“The American people and businesses are tightening their belts,” Bayh added. “I think we need to show that the government can economize as well.”

The anxiety that moderate and conservative Democrats in the Senate are feeling about Obama’s agenda is potentially significant. In the House, moderate Democrats have much less leverage to slow action on a majority that under Speaker Nancy Pelosi is eager to embrace the boldest and most expensive parts in the agenda.

In the Senate, where it takes 60 votes to end debate, a few reluctant Democrats can cause big problems for Obama — a reverse of the dynamic that last month gave a few ready-to-bargain Republicans enormous clout in passing a major stimulus package.

It was that package, combined with at least $700 billion in bailouts to the financial sector, combined with the recently unveiled budget, that has some Democrats at the breaking point — even as most say they basically agree with Obama that massive intervention is needed to help a sick economy.

If the moderate Democrats in the Senate are willing to work with moderate Republicans — as Bayh said they are eager to do — they will negate the White House’s ability to portray opposition to Obama’s spending as partisan obstructionism.

Traditionally, senators are much more independent than House members, and much less likely to organize in caucuses of like-minded colleagues. But moderate Democratic senators seem intent on shaking up the culture of the upper chamber.

“If we’re going to get 60, we have to have the pragmatists, the moderates in the Senate, in the Democratic caucus working together and reaching out to those on the other side, of like minds,” Bayh said. “And this group would facilitate that process.”

Ken Baer, communications director for the White House’s Office of Management and Budget, said the budget overview is the administration’s srategy for “addressing big challenges, both fiscal and economic, that have been overlooked for some time now. We look forward to working with congresspeople from across the political spectrum on how to tackle these challenges.”

In his budget request, Obama calls for a massive restructuring of federal priorities, including a $634 billion fund to overhaul the country’s health care system. While the deficit would swell in the near term, the president has promised to cut it in half by the end of his first term.

To do that, Obama has proposed an array of tax hikes that have been greeted with a chilly reception from Republicans and moderate Democrats. Under Obama’s plan, most of the tax increases would be delayed until 2011, when the tax cuts enacted under Bush would expire, increasing taxes on families making more than $250,000 from 35 percent to 39.6 percent. While Obama would attempt to save small businesses on their tax payments, he would target an array of companies for hikes, like oil and gas firms, companies that do businesses overseas, and hedge funds and other private equity firms.

“I have major concerns about trying to raise taxes in the midst of a downturn of the economy,” said Nelson, the conservative Nebraska Democrat. “On the one hand, you’re trying to stimulate the economy. On the other hand, you’re trying to keep money from going into taxpayers’ pockets. It’s very difficult to make that logic work.”

Nelson also highlighted concerns with changes in agriculture payments that are being proposed, as well as the Obama administration’s assumption that it would receive revenue from a cap-and-trade bill to curb global warming, even though enacting such a plan would be daunting.

A senior administration official, who asked for anonymity, said the White House would be looking for additional cuts in the budget and would eventually get the debt under control. But the official said the budget was large in size and scope in order to respond to the swooning economy that Obama inherited.

“We inherited a huge, huge problem: unbelievable mismanagement,” the official said.

Sen. Claire McCaskill of Missouri, who is also part of the moderate Democratic group, agreed with that sentiment. But she added that she hadn’t “scrubbed” Obama’s proposed budget yet and that “we need to be careful not to use the economic crisis to get into bad habits.”

Similarly, Sen. Mark Begich (D-Alaska) said he wants to ensure that new spending in Obama’s budget remains funded for only one year. “If it’s coming and staying, then I have a problem,” Begich said just before he headed off to the meeting with the moderate Democrats.

Other Democrats in that group include Sens. Mark Warner of Virginia, Bill Nelson of Florida, Amy Klobuchar of Minnesota, Mark Pryor of Arkansas, Jeanne Shaheen of New Hampshire, Robert P. Casey Jr. of Pennsylvania, and Blanche L. Lincoln of Arkansas, as well as Joseph I. Lieberman (I-Conn.).

“At what point of time do you say enough is enough?” said Sen. Jon Tester (D-Mont.), a centrist who is not part of the group. “I don’t know where that is at this point.”

Josh Gerstein contributed to this story.