Tags: GOP | budget | battle

Republicans Gear Up for $3.5 Trillion Budget Battle

Monday, 02 Mar 2009 08:50 AM

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WASHINGTON – Republicans Sunday signaled they are ready to seize a gauntlet thrown down by US President Barack Obama over his whopping 3.55 trillion dollar budget, heralding a bruising Congress battle ahead.

"I think it's terrifying in the policy implications as well as mind-boggling in the numbers," Republican Senator Jon Kyl told Fox News Sunday, referring to the budget unveiled last week.

Debate on the 2010 fiscal year budget which aims to kickstart the world's largest economy through economic reforms, as well as spending on healthcare and climate change, will occupy lawmakers in the coming weeks.

But the draft was loudly denounced by Republicans Sunday, who warned it would increase taxes on all, stifle small businesses seen as key to economic growth and leave future generations struggling to repay huge government debts.

"What we see in this budget, frankly, is an attempt, again, to try and stimulate the economy through government expenditure. And, you know, at best what that can do is redistribute wealth," Republican House minority whip Eric Cantor told ABC.

"It can't create jobs; it can't create wealth. We've got to get back to focusing on job creation and creating prosperity."

Republicans, still smarting from their rout in the November elections, could hamper the budget's passage through Congress and are preparing to unveil an alternative plan in April.

"I think this budget sets the stage for the biggest fight over the future of America since 1965," former Republican speaker Newt Gingrich told CBS Friday.

Congressman Paul Ryan, the top Republican on the House Budget Committee, agreed on Fox News Sunday saying: "The concern that I have with this budget in the macro sense is it's almost as if we're relocating the headquarters of the American economy from Main Street, from New York, from Chicago, from Silicon Valley, to Washington, DC and putting Washington, DC in the driver's seat of the American economy."

Influential radio talk show host Rush Limbaugh, giving the keynote address at a leading conservative conference on Saturday, slammed the new administration's approach.

"Ronald Reagan used to speak of a shining city on a hill. Barack Obama portrays America as a soup kitchen and some dark night in a corner of America that's very obscure," he said.

The Obama plan includes more than 600 billion dollars over 10 years for a "down payment" on healthcare reform, to help some 45 million Americans without health insurance, and a similar annual sum for defense.

It also aims to fulfill Obama's campaign pledge to raise taxes on Americans earning more than 250,000 dollars a year by five percent, yielding some two trillion dollars over 10 years, while cutting taxes for some 95 percent of Americans.

Obama said in his weekly address that the budget was part of the change he had promised "and that is the change I'll be fighting for in the weeks ahead."

He added he knew special interests and lobbyists are "gearing up for a fight as we speak. My message to them is this: So am I."

Rahm Emanuel, the White House chief of staff, confirmed on CBS that the administration was hoping for the 2010 budget to be passed in April, which could be optimistic given that the last tranche of the 2009 budget was only approved last week.

"The challenge will be .... will the Republicans meet the challenge of the future or keep us on the path that they have set for the last seven years that got us to this point of reckoning?" Emanuel asked.

He and Obama's budget chief Peter Orszag Sunday both defended the plan, stressing the administration had inherited the worst economic crisis since the Great Depression of the 1930s, and a 1.7 trillion dollar deficit in fiscal 2009.

But Republicans hit back that the tax cuts will not alleviate the plight of millions of Americans hit by the crisis.

"You know, more than half of the people who pay these higher taxes are the small businesses of America, which produce 70 percent of our jobs," Ryan said.

They also took aim at Obama's plans for a "cap-and-trade" system on carbon gases, which would impose a tax on the country's worst polluters.

"This new energy tax hits everybody. Unless you never buy any gasoline, or you never use any electricity in your home, or you never buy anything that was made with this energy -- which is, of course, absurd -- it'll hit every single person," said Kyl.

© 2009 Agence France Presse. All rights reserved.

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