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Obama's agenda may not add up

July 08, 2008|Peter Nicholas | Times Staff Writer

WASHINGTON — In more than a year of campaigning, Barack Obama has made a long list of promises for new federal programs costing tens of billions of dollars, many of them aimed at protecting people from the pain of a souring economy.

But if he wins the presidency, Obama will be hard-pressed to keep his blueprint intact. A variety of budget analysts are skeptical that the Democrat's agenda could survive in the face of large federal budget deficits and the difficulty of making good on his plan to raise new revenue by closing tax loopholes, ending the Iraq war and cutting spending that is deemed low-priority.

Like predecessors who also had to square far-reaching promises with inescapable budget realities, they say, a President Obama might need to jettison pieces of Obama-ism.

"I don't think it all adds up," Isabel Sawhill, an official in President Clinton's Office of Management and Budget, said of Obama's spending plans.

"There will definitely need to be a recalibration of these proposals once someone is in office," said Sawhill, now a senior fellow at the Brookings Institution. "The fiscal situation just isn't going to permit doing what Sen. Obama or anyone else would like."

On Monday, Obama repeated his commitment to his agenda, as both he and his Republican opponent, John McCain, spent the day highlighting their plans to revive the economy.

McCain, appearing in Denver, said he would create new jobs and balance the budget by the end of his first term in 2013 -- a claim that has drawn skepticism because he wants to extend President Bush's tax cuts that are due to expire.

Obama said Monday that his plan would provide more help to struggling middle-class families.

"I think it is important for us to make some critical investments right now in America's families," the senator from Illinois told reporters in St. Louis, where his plane made an unscheduled stop to resolve a mechanical problem.

In remarks he had intended to deliver in North Carolina, Obama said his plan would "not only ensure the economic security of middle-class families in the long term, but also the need to give them a chance for some relief in the short term, to make sure that Americans aren't just getting by but getting ahead."

Among other proposals during the course of the campaign, Obama has said he would strengthen the nation's bridges and dams ($6 billion a year), help make men better fathers ($50 million a year) and aid Iraqis displaced by the war ($2 billion in one-time spending). Last week, he pledged to give religious and community groups $500 million a year to provide summer education to low-income children.

Other proposals are more costly. Obama wants to extend health insurance to more people (part of a $65-billion-a-year health plan), develop cleaner energy sources ($15 billion a year), curb home foreclosures ($10 billion in one-time spending) and add $18 billion a year to education spending.

It is a far different blueprint than McCain is offering. The senator from Arizona has proposed relatively little new spending, arguing that tax cuts and private business are more effective means of solving problems.

The total price tag of Obama's plans, according to his campaign, is $130 billion a year. On top of that, Obama is proposing a middle-class tax cut of about $80 billion a year.

Obama's campaign says the new spending would be more than offset by cuts to existing federal programs and other savings.

"His plan reallocates what we're spending today on the war in Iraq and wasteful and low-priority government programs into higher-priority investments in our future," said Jason Furman, Obama's economic policy director.

Some budget experts point to the last Democratic presidency, Bill Clinton's, as an example of the budget pressures Obama might face.

Clinton campaigned in 1992 on a platform he called "Putting People First," which included government spending on job training and other programs to help middle-class Americans navigate the economy. But after his election, Clinton scaled back his ambitions and made deficit-cutting a priority instead, following the counsel of advisors such as Robert E. Rubin.

Clinton wound up charting a centrist course in his two terms, and declared in 1996 that "the era of big government is over."

Rubin is now an advisor to Obama. One of the men who also wanted Clinton to cut the deficit first was Leon E. Panetta, who eventually became Clinton's chief of staff.

Panetta predicts that Obama is in for a similar reckoning.

"I accept that all candidates throw out a lot of proposals when they're campaigning," Panetta said in an interview. "You have to assume that's all part of a campaign strategy to appeal to a lot of different constituencies that are out there. But once he enters the Oval Office, he's going to have to make some hard decisions."

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