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Orszag Encounters the Senate

And criticism of the president's budget mounts.

5:26 PM, Feb 2, 2010 • By MATTHEW CONTINETTI
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How serious a document is the president's budget proposal? The establishment media do not seem to like it. The budget's long-term projections are enough to drive you to drink. No political faction is satisfied with the administration's proposals. Liberals do not like the freeze on their favorite part of the budget; conservatives do not like the budget's tax hikes and massive deficits. Even the White House has reason to be disappointed. According to its own budget, unemployment will be at 7.9 percent when Obama stands for reelection in 2012. Only a huge, unanticipated economic boom will produce enough tax revenues to delay the fiscal reckoning and improve Obama's political standing.

Orszag Encounters the Senate

I suspect the budget that Congress passes by the end of the year -- if it passes a budget by the end of the year -- will be substantially different from the Obama administration's blueprint. For one thing, the White House counts on health care reform becoming law; there is no reason to believe Nancy Pelosi has the 218 votes to pass the Senate bill, however, and there will be less reason to believe it as we move closer to November. For another, the Senate seems to like Obama's spending freeze, but what will liberals in the House do?

Obama deferred to Congress throughout his first year in office. But now his interests (reelection in 2012) are diverging from Pelosi's and Reid's (saving their skins in 2010). Once the jobs bill passes, expect to see friction between the White House and Capitol Hill on issues ranging from Gitmo, to energy, to taxes, to spending, to financial regulatory reform.

Case in point: Budget chief Peter Orszag's Senate testimony today, where he received bipartisan criticism. You can watch a particularly testy encounter between New Hampshire Republican Judd Gregg and Orszag here. And Gregg actually contemplated serving in the Obama administration!

Obama calls his team of wonks the "propeller heads." This has not been their best week. Geithner took a drubbing at the House on January 27; Orszag was criticized today; after Sarah Palin called him on it, the White House announced that Emanuel apologized for an epithet. So far, Obama's 32 speeches on the subject have failed to win public approval of the Democratic health bill.

Propeller-head intellects may dazzle the press. But Congress and the people? Not so easily impressed.

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