Focus on spending, budget returns

Capitol Hill will focus on a busy economic agenda President Obama has for the week that includes a White House fiscal responsibility summit, his fiscal 2010 budget outline, and his first address to a joint session of Congress.

At the same time, lawmakers will look to begin putting fiscal 2009's leftover appropriations battle behind them.

The House this week is expected to take up an omnibus appropriations package containing the nine remaining fiscal 2009 appropriations bills.

Congress must either pass the omnibus or approve another continuing resolution to keep much of the federal government going. The CR, which was approved in September, expires March 6.

The stopgap spending measure includes three fiscal 2009 spending bills -- Defense, Military Construction-VA and Homeland Security -- that cover the entire fiscal year, but the remaining appropriations bills are funded at fiscal 2008 levels.

The spending bills were the last legislative casualty in the battles between former President George W. Bush and Democrats over spending priorities.

House Republicans, who put the price tag on the omnibus at about $400 billion, have called on Democratic leaders to post the package online so they can read it.

"My colleagues in the Republican leadership and I made this request two weeks ago, and to date, our request has gone unanswered," House Minority Leader John Boehner, R-Ohio, said in a statement late last week. "Time is running short, and American taxpayers deserve to know how their hard-earned tax dollars will be used under this legislation."

The Senate is expected to take up the package next week and send it to Obama for his signature.

Meanwhile, the White House Monday will host about 130 guests for a fiscal responsibility summit, including Democratic leaders in Congress, the chairs of key committees, and an array of representatives from business, academia, finance and labor.

"The summit is the first step in the process of beginning to lay out how we can bring down the deficit and put our economy back on a sound financial footing," White House Press Secretary Robert Gibbs said at a briefing Friday.

Presentations by Moody's Economy.com economist Mark Zandi and Center on Budget and Policy Priorities Executive Director Robert Greenstein will open the summit. Then after hearing from Obama and OMB Director Peter Orszag, the participants will break up into smaller discussion groups, to focus on challenges such as taxes and revenue, health care, Social Security, procurement and the budget process, Gibbs said. Each group will be moderated by a senior administration official. The larger group will reconvene and report to the president on their initial work.

The summit has come under fire from the left and the right. Liberals are unhappy that deficit hawk Pete Peterson has been invited and fear he will influence cuts in Social Security and the safety net. Conservatives are skeptical any true reforms can come from a White House that pushed the stimulus spending. Former House Speaker Newt Gingrich, R-Ga., told Fox News the summit is "pure public relations."

But Gibbs said the summit promises "a frank discussion on how we can address the long-term fiscal problems facing this country."

Fixing the nation's long-term fiscal problems is a theme Obama will hit in his address to Congress Tuesday night. CBO has put the fiscal 2009 deficit at $1.2 trillion, while unfunded liabilities for Medicare and other entitlement programs total about $56 trillion, according to the Treasury Department's latest estimate in December.

"I think what you will hear from the president on Tuesday is a discussion about the decisions that we are going to have to make collectively to get ourselves back on a path toward some sustainable fiscal track," Gibbs said.

Meanwhile, Obama will unveil his fiscal 2010 budget outline Thursday, which is expected to project a larger deficit than CBO's fiscal 2009 $1.2 trillion figure and will include some of the funding for the wars in Iraq and Afghanistan. The full budget will come about a month later.

"Some of the actions that we are going to take ... [include] honesty in budgeting that give people a fuller picture of what's going on," Gibbs said. "Putting some of the worst spending back on budget; putting some disaster spending back on budget. ... What that will show you on Thursday is a deficit far bigger and far redder than what might have first been imagined, because for many years we have used tricks and gimmicks to mask the size of our irresponsibility."

House Budget Committee Democratic staff director Tom Kahn lamented the budget circumstances.

"We inherited a fiscal disaster," Kahn said. "The deficit is going to be huge; considerably more than the $1.2 trillion projected by CBO for fiscal 2009."

The budget will indicate the direction the Obama administration hopes to go in regard to renewable energy and health care.

"I think people will definitely know that the president is taking swift action to invest in renewable energy, and ensure that we reduce our dependence on foreign oil and that we are taking steps to make health care more affordable for millions of Americans and while providing those that don't have health insurance with access," Gibbs said.

The budget outline will likely have a traditional 10-year horizon instead of the five-year window employed under Bush, budget experts said.

"Given that the next five years are going to look very bad, I think the president has an incentive to show a 10-year budget because it is in the second five years that the budget picture may actually start to improve a little bit depending on how the economy recovers," Brian Riedl, a senior policy analyst on budget issues at the Heritage Foundation, said.

Statutory pay/go budgeting is another item experts expect in the budget, which would make the congressional budget rule a law and therefore more difficult to circumvent.