Prioritizing Spending Pledges Will Be a Challenge for a New Administration With Ambitious Goals for Health Care, EnergyArticle
By LAURA MECKLER and NEIL KING JR...www.wsj.com
WASHINGTON -- Barack Obama won the presidency making hundreds of promises large and small, from ending the war in Iraq and global warming to boosting low-income heating assistance and expanding the Peace Corps. Now comes the hard part: translating those pledges into policies, and whittling down the list while keeping his broad coalition of supporters happy.
His opening moves are ambitious. The incoming administration plans to move fast on his proposal to overhaul the health-care system, with a major event at the White House, likely in March, two Obama officials said. There, members of Congress and interest groups will hold a working session of sorts to launch the debate.
The stand is set up in front of the Capitol ahead of Tuesday's presidential inauguration of Barack Obama.
Mr. Obama also will press for overhaul of the financial-regulatory system, a bookend to the $700 billion bailout lawmakers reluctantly approved.
And he will push for legislation to require use of alternative fuels such as wind and solar for electricity generation, known as the renewable portfolio standard, an Obama aide said.
Broader action on climate change to control carbon emissions is also on the agenda but may wait until later in the year. The so-called cap-and-trade legislation is opposed by industry, and even some advocates think it will be difficult to complete this year.
Already, Mr. Obama has an opportunity granted almost none of his predecessors. Because of the economic crisis, he is meeting an unusual array of promises almost immediately, including heavy investments in energy and other priorities.
But the unprecedented largess granted through the $825 billion economic-stimulus bill may bind his hands later. The growing deficit will make it difficult, if not impossible, to fulfill spending promises that total hundreds of billions of dollars.
And it could stir political tensions with congressional Republicans and voters nervous about a binge of deficit spending.
This burst of spending so early in his presidency could also hobble Mr. Obama politically in the years to come as the country's soaring budget deficit demands cutbacks in social programs and even potential tax increases.
Mr. Obama has spoken starkly of this challenge in recent weeks, as has his nominee for budget director, Peter Orszag. "The most pressing challenge is to jump-start the economy out of the worst economic crisis since the Great Depression," Mr. Orszag told Congress last week. "Over the longer run, a key challenge is putting the budget on a more sustainable course," Mr. Orszag told Congress last week.
Put another way, Mr. Obama must spend massive sums now in order to spend far less later. The incoming president already has begun to talk about the generational challenge of reining in Medicare and Social Security spending, with a summit planned to begin the conversation. With this year's budget deficit expected at $1.2 trillion, not counting the stimulus spending, the next administration must also wrestle with skyrocketing costs to simply service the national debt. Interest payments on the national debt came in at more than $412 billion last year, or over 9% of the total budget.
As a candidate, Mr. Obama was able to promise all things to all people, and position papers still posted on his campaign Web site detail hundreds of pledges made. The Web site PolitiFact.com, a project of the St. Petersburg Times, counts 510 promises and is tracking action on each.
Many require new spending -- a total of hundreds of billions of dollars, according to internal tracking -- which will be challenging if not impossible given the record federal deficit. He proposes a billion dollars for autism research, a pricey global education fund and billions more for special education, to name a few.
"There are interest groups that care about every one of them," said incoming White House Chief of Staff Rahm Emanuel. "Like everything in life, you prioritize."
The National Head Start Association, for instance, was thrilled to find an additional $2.1 billion for the preschool program in the House economic-stimulus plan, with further funds for other aspects of early childhood education. But Michael McGrady, the association's interim executive director, said he would be disappointed if that's it.
Mr. Obama pledged $10 billion per year toward expanding early childhood education, including Head Start.
Some promises can be fulfilled with a stroke of a pen, and Mr. Obama is expected to issue early executive orders on a variety of topics. This week, he will begin the process of closing the military prison at Guantanamo Bay with an executive order. He is also expected to restore funding to overseas family planning programs, likely this week.
Other promises require action by Congress, and many see health-care measures and cap-and-trade legislation to control carbon emissions as competing priorities.
Mr. Obama's budget, a starting point for Congress's work, will assume action on both fronts, two Obama officials said. Mr. Emanuel declined to say whether the new White House wants Congress to deal with health care or climate change first, though another transition official said the assumption is that health care will top the agenda.
Mr. Obama is poised for some early victories as part of the economic-stimulus bill, including funding for infrastructure, health-care information technology and his middle-class tax cut. Congress is also set to send him legislation on pay equity and expanding the Children's Health Insurance Program.
"You can see from early actions…that we are working through a list and paying down on the biggest commitments," Mr. Emanuel said. "Commitments are being passed into legislative action already."
Energy is where Mr. Obama can say he has most lavishly met his many promises made over the past year, including billions of dollars in the stimulus bill to update the electricity grid, weatherize homes and make federal buildings more energy efficient. But this unprecedented spurt of spending on energy projects represents the easy work for the new administration. Funding for additional energy work will most likely hinge on passage of the far more contentious cap-and-trade legislation, costly to industry. Even proponents within the environmental community concede that the country's deepening economic woes could delay passage of a big climate bill well past 2009. That would pose problems for the whole of Mr. Obama's energy agenda.
"The worry is that there is such an emphasis now on spending and jobs, while a lasting structure needs to be established," says Steve Nadel, director of the American Council for an Energy-Efficient Economy, a Washington industry group. "If a climate regime isn't established until 2012 or 2013, how do you bridge paying for the work that's under way in the meantime? What do you tell to a big weatherization industry when everything dries up in 2011? 'Thank you very much and have a nice day?' "