A White House statement Wednesday encouraging Congress to enact binding pay-as-you-go rules into law is the latest in a battery of moves by President Obama aimed at making him look more fiscally responsible.
It’s an indication that Obama and his top aides, despite their positive talk after the Massachusetts election, have noted voter dissatisfaction with the White House’s dealings on government spending and fiscal issues.
Here are the five things Obama is doing to try to get in front of anger over government spending. Below each point are rebuttals from a top Republican congressional aide making the case that Obama’s actions are all intended “to cover things that are hurting him.”
1. PAYGO: “Statutory PAYGO would hold the government to a simple but bedrock principle: Congress can only spend a dollar if it saves a dollar elsewhere,” said White House press secretary Robert Gibbs. PAYGO would require any spending increases to be offset by cuts in other areas or tax increases.
GOP response: “PAYGO covers massive deficit spending, stimulus, etc.”
2. A bipartisan budget commission: Obama is expected to announce the creation of such a commission in his State of the Union speech, to tackle the country’s long-term deficits and unpaid obligations. The Senate on Tuesday voted down a commission that whose recommendations would have required a congressional vote.
GOP response: “A budget commission covers massive deficit spending, no entitlement reform.”
3. Spending freeze: Obama will also, in the SOTU, announce a three-year freeze of spending for a small portion of the federal budget.
GOP response: “I think any indication the administration is trying to reduce spending is a good thing, but we’ve been on quite a binge over the last 12 months, and it’s going it take a lot more than just this kind of modest freeze to get us back on the right track,” said Senate Minority Leader Mitch McConnell, Kentucky Republican, on Tuesday.
4. The “Volcker rule”: Obama announced last week a proposal to limit the amount of investment banking that large holding banks can engage in. There have been complaints, however, that the proposal is completely opaque.
GOP response: “The Volker rule covers the fact that he’s closely associated with helping the banks.”
5. The bank tax: This is the one measure Obama announced before the Massachusetts election, albeit only a few days prior. It is the most punitive as well, seeking to tax the largest financial institutions to receive money from the $700 billion TARP for up to $117 billion, in order to make up a shortfall caused by the continued struggles of U.S. automakers and Fannie Mae and Freddie Mac.
GOP response: “The bank tax covers his support for keeping TARP alive, and the money that went to the automakers (where much of the unpaid TARP money was lost).”
A White House official also pointed out that the president is extending a pay freeze on senior administration officials, announced last year, for another year, and extending it to political appointees.
And Marc Ambinder notes that there will be, in the SOTU, “tax cuts and goodies targeted at small businesses, including several items on the [National Federation of Independent Business]’s wish list: the package of middle class family tax adjustments and credits, including special help for families with children and families caring for both children and elderly adults.” More details on this here.