Obama Signals End to Spending Orgy

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The luxe life won't necessarily be a slam dunk any more for players who aren't LeBron James. Photo: Everett Bogue; Photos: Getty Images

The theme of this week is fiscal responsibility, and President Obama is kicking off the festivities today with an aptly titled "Fiscal Responsibility Summit" to discuss the exciting ways we can reign in entitlement spending. That will be followed by a State of the Union–type address to Congress tomorrow, and the release of his budget outline on Thursday. But what we already know is that Obama hopes to slash the federal deficit in half by 2013, based on savings from winding down in Iraq and raising taxes on those making over $250,000 a year. The budget will also forgo the gimmicks that President Bush relied on, such as not including the costs of the wars or of natural-disaster emergency relief. From the early reactions, Obama's plan is going to be controversial, difficult, and not necessarily feasible.

• Matt Cooper thinks Obama's deficit reduction is "an ambitious goal, but given the economy — and given the track record of recent presidents — it’s a target the nation’s 44th chief executive is likely to miss." But he hopes "Obama can do two things at once that are seemingly contradictory — saving while spending, and preparing for austerity while being profligate — to forestall something much worse." [Portfolio]

• Chuck Todd and friends compare Obama's focus on the deficit to diet and exercise after an all-you-can-eat buffet. The lack of budgetary gimmicks makes Obama's plan "even more ambitious." [First Read/MSNBC]

• The Washington Post editorial board applauds Obama's gimmick-free budget as "another welcome sign of willingness to deal with fiscal reality." But they also suggest that "Obama would be wise to use the economic crisis as a reason to rethink some of his campaign promises, such as not to raise taxes on anyone making less than $250,000" if we're really going to close "the existing gap between spending and revenue." [WP]

• Steve Benen suggests that the GOP won't be thrilled with the higher taxes on the wealthy, but it "is, of course, entirely in line with the agenda presented to the electorate in 2008." [Political Animal/Washington Monthly]

• Jennifer Rubin is skeptical that we'll actually save money from drawing down in Iraq, since the timing of that plan is still unclear, and we're also ramping up in Afghanistan. Obama's "bait and switch routine is badly in need of a catchy phrase. Perhaps 'hocus pocus budgeting.'" [Contentions/Commentary]

• James Pethokoukis is unimpressed that "after consulting economists and businesspeople on the left and the right, after looking for the best ideas he could find no matter what their origin, Obama comes up with the need to raise taxes and cut defense." [Capital Commerce/US News]

• Jed Babbin claims Obama's budget plan, including increasing taxes on capital gains and cutting defense spending, is "a recipe for continuing our economic slide into a depression." [Human Events]

• Brian Wingfield and Daniel Indiviglio write that some may see this week's focus on the budget as "an example of post-binge responsibility." [Forbes]

• Ben Pershing says "Obama may well seem schizophrenic, but he is also responding to the public mood," which indicates increasing concern about the deficit. [Rundown/WP]

• Noam Scheiber calls it "genuinely courageous" that Obama proposes to tax "the investment income of hedge fund and private equity partners at ordinary income tax rates," because "lots of Obama's top supporters manage money and benefit from the loophole that lets them classify income as capital gains." [Plank/New Republic]

• Kevin Drum agrees that it's a good thing that "Obama is going to try to embarrass [Democrats] into finally doing the right thing and making rich people pay the same rate on their income as everyone else." [Mojo/Mother Jones]

• Ben Smith calls managing the deficit "easily the trickiest public relations challenge of his young presidency — balancing sober, but optimistic talk about the government’s dismal financial state, on a timeline not of his making." [Politico]