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Shelby Sees "Financial Destruction" In Obama Budget

(AP Photo/Haraz N. Ghanbari)
Sen. Richard Shelby blasted President Obama's proposed budget Wednesday, calling it a "scary" plan will take the nation down the "road to financial destruction."

"What we see is scary. It projects huge deficits and then, ultimately, debt," the Alabama Republican told The Early Show. "I see in the budget the road to financial destruction."

On Tuesday, Mr. Obama defended his economic agenda during a primetime news conference.

"The best way to bring our deficit down in the long run is ... with a budget that leads to broad economic growth by moving from an era of borrow and spend to one where we save and invest," he told reporters. (Read AP's fact check of Mr. Obama's address.)

Mr. Obama also repeated the fact that he inherited a $1.3 trillion deficit from the previous Republican administration. Shelby conceded the point but said current projections would far exceed that amount.

"We had a deficit, but it was nothing like this. The projection of his years in office, by his own budget people, this will be larger deficits … than all the presidents put together from George Washington. This is scary," he said.

The president's budget is currently under revision by Congress and dour deficit projections might mean cuts to the spending plan.

Watch Bill Plante's budget report and Sen. Shelby's interview.

Last week, the Congressional Budget Office released projections for Mr. Obama's budget that would create a $1.8 trillion deficit for this year and $9.3 trillion deficits over 10 years – a figure that many economists think is unsustainable. Mr. Obama's estimates for the current year's budget gap are in line with the CBO, but his 10-year projection is much rosier – about $2.3 trillion less than congressional auditors foresee.

"I believe we've reached the tipping point and if we tip over, it's a point of no return. We're looking at inflation and financial and economic destruction," Shelby said.

He also told The Early Show that he would not work with the president on a compromise budget.

"I don't think we should compromise destruction of our economic system. And this is where we're going here. We should work with the president when we think the president is right. But I believe he is totally going down the wrong road here."

Shelby also weighed in on Treasury Secretary Timothy Geithner's recently announced plan to create public/private partnerships to buy up banks' toxic mortgage assets.

"We'll have to wait and see. … the devil is always in the details. We have to see how this is priced and how it works, because if you price these assets too high, people make a windfall – probably off the taxpayers. If it's too low, the banks won't sell them."