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All Sides Seek More Spending           01/30 06:21

   As the nation's ledger adjusts to decreasing levels of deficit spending, the 
voices in Washington calling for austerity are barely audible. Republicans want 
more defense spending. Democrats want more domestic spending. And President 
Barack Obama wants both.

   WASHINGTON (AP) -- The deficit is dead. Long live the deficit.

   As the nation's ledger adjusts to decreasing levels of deficit spending, the 
voices in Washington calling for austerity are barely audible. Republicans want 
more defense spending. Democrats want more domestic spending. And President 
Barack Obama wants both.

   For the first time since the 2011 Budget Control Act put in place a series 
of automatic spending cuts, Obama might be in the best bargaining position to 
move the debate his way. And that's with Republicans in charge of Congress.

   Obama on Thursday called for a 7 percent boost in government spending that 
would nullify those 2011 so-called sequestration cuts and increase domestic and 
defense spending by a total of $74 billion in nearly equal amounts.

   "Let's make sure that we end this across-the-board sequester that doesn't 
differentiate between smart government spending and dumb government spending," 
he told a gathering of Democratic lawmakers in Philadelphia.

   That's not to say that Obama's budget, set for release on Monday, stands any 
better chance than his previous budgets at winning congressional support --- 
i.e., zero. But as a negotiating document, it might not be so easily dismissed.

   "President Obama would like there to be more nondefense spending, and will 
try to use defense spending to drive a wedge in the Republican Party, and build 
support for busting the sequester levels. He will likely succeed," said Kevin 
Hassett, an economist at the conservative American Enterprise Institute and an 
adviser to Mitt Romney's 2012 presidential campaign.

   Left out of all these equations is the nation's long-term fiscal picture. 
Amid the current wish lists for more child care, free community college, and 
bigger ship and submarine fleets, little is said about an aging population, a 
growing national debt and the demands on the government created by greater 
health care access.

   That means that while the deficit is now at its lowest since 2007, it will 
likely be back with a vengeance within the decade.

   The Congressional Budget Office this week projected that based on current 
laws, deficits will eventually rise from $468 billion this year to $1.1 
trillion in 2025. The factors behind the increase: baby-boomer retirements, 
increased federal subsidies for health care, increasing health care costs and 
rising interest on the federal debt. These are on the mandatory spending side 
of the ledger, not the discretionary costs that are subject to annual 
congressional appropriations. Without more revenue or reduced benefits, the 
deficit can only grow.

   "I'm sure we'll have another knock-down, drag-out over discretionary 
spending," said Robert Bixby, executive director of the budget watchdog Concord 
Coalition. "Probably there will be some kind of deal between the White House 
and the Congress, but that deal may also be to ignore the entitlement and tax 
reform."

   Republicans and Democrats have been doing the equivalent of whistling past 
the graveyard on the long-term deficit ever since Obama and House Speaker John 
Boehner failed to reach a historic deal four years ago. Since then, the budget 
cutting has focused on the easier stuff.

   Long-term tax revenue has been off the table, as have any cost-saving ideas 
for Medicare and Social Security.

   Still, the deficit dropped thanks to a tax increase on the rich, an 
improving economy and the domestic and defense spending cuts agreed to in the 
Budget Control Act of 2011.

   Now those cuts have proved too painful to both parties.

   Congressional Republicans are divided on how to pay for additional Pentagon 
spending. Some want cuts in domestic spending, others have even suggested tax 
revenue --- a toxic idea among many conservatives. Obama seems determined to 
take advantage of the lack of agreement.

   "Whatever it takes, within reason, to get this problem fixed is what I'm 
willing to do," said Sen. Lindsey Graham, R-S.C., adding that he would be 
willing to consider more tax revenue "just to get the damn thing done."


(KA)


 
 
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