Cheney Slams ‘Out of Whack’ Obama Budget Plans

ABC News’ Matthew Jaffe reports: Former vice president Dick Cheney continued his recent verbal assault on President Barack Obama’s policies, denouncing the new administration’s budget plans as “way out of whack.”

“I think the budgets he submitted are way out of whack,” Cheney told CNBC’s Larry Kudlow in an interview. “I think what it does not only to the short-term deficit but long-term debt situation is very objectionable.”

The administration’s deficit for the current budget year is expected to hit a record $1.8 trillion, mainly due to the government’s efforts to rescue the country from its current recession, such as the Wall Street bailout and the stimulus package.

The administration has recently stepped up the efforts of the Treasury Department and the Federal Reserve, with a flurry of programs to get bad assets off of banks’ balance sheets, jumpstart lending to consumers and small businesses, and stop the housing crisis.

Peter Orszag, director of the Office of Management & Budget, wrote on his blog that the deficits “are driven in large part by the economic crisis inherited by this administration.”

The Bush regime inherited a $127 billion budget surplus, but set five record-high budget deficits in seven years and left office with the national debt over $10 trillion.

According to former Treasury Secretary Paul O’Neill, Cheney once told him during a cabinet meeting, “Reagan proved deficits don’t matter.”

Despite the increases in the near-term future, President Obama has pledged to cut the deficit in half by the end of his term.

However, in recent weeks the ongoing crisis has prompted worries that the United States might lose its AAA credit rating. The concerns come after rating agency Standard & Poor’s warned Britain that its perfect rating could be in jeopardy due to the country’s rising debt.

Cheney said there was reason to worry that the United States’ credit standing could be downgraded.

“That’s got to be of concern,” he warned.

Last week, White House spokesman Robert Gibbs said the administration was more focused on fixing the economy than worrying about credit ratings.

“We’re not concerned about a change in our credit rating,” Gibbs said last Friday. “What the President is focused on and has been since coming into office was getting in place a recovery plan that will create jobs and get this economy moving again. Short term, the way to bring down the deficit is get this economy moving again. Medium to long term, we have to get our fiscal house back in order, and that’s why the President was pleased that Congress passed a budget that cuts the deficit in half in four years.”

–Matt Jaffe

Rep. Scott Garrett: ‘A Little Bit’ Concerned About GOP Unity on Budget

ABC News’ Rick Klein reports:

Today on “Top Line,” we chatted with Rep. Scott Garrett, R-N.J., about President Obama’s budget, and about Thursday night’s vote in the House.

We pointed out that more Republicans voted against the GOP budget than the number of Democrats who voted against the Democratic budget — and asked if that concerned Garrett, who serves on the House Budget committee.

“A little bit, but I can understand exactly why some of those members voted against the Republican budget,” Garrett said. “You’re going to get some defections on it, and I think at the end of the day the reality is that everyone knew that all the budgets except for the Democrat budget was going to fail, and so people went to where they felt most — where they fit in best. So, I think some people were even more conservative than the Republican budget went there, and the liberals of course went all the way over to the progressive and the Democrat budget.”

Click here to watch our full interview with Rep. Scott Garrett, R-N.J.

Garrett questioned whether Democrats were serious about wanting bipartisanship with the budget.

“Despite all the rhetoric that the administration proclaimed at the beginning of this process of saying that they were going to work with us and what have you, I think the Republicans tried,” he said. “I know — I serve on the Budget Committee, and we tried.”

Also on the program, we talked with ABC’s George Stephanopoulos about President Obama’s trip to Europe — and about Gov. Sarah Palin’s political play in calling for a re-vote in the Alaska Senate race.

Click to here watch our full interview with ABC’s George Stephanopoulos.

GOP Rep. Brady: Obama is Wrong; Republicans Will Offer Alternative Budget

ABC News’ Rick Klein and David Chalian report: Pressed on Republican critiques of his budget plan at Tuesday night’s press conference, President Obama had a ready answer

“I mean, we haven’t seen an alternative budget out of them,” the president said.

But what will the response be when that’s no longer the case?

“We’ve offered a lot of comprehensive proposals on this stimulus, on the omnibus, but we’re gonna also have a complete budget that, unlike his, does not use funny money, does not have tax increases,” Rep. Kevin Brady, R-Texas, said on “Politics Live” today.

“We always offer a comprehensive budget alternative, even if it’s rejected by the Democrats,” Brady added, “but we’ve seen what happens when Democrats spend. Deficits go through the roof. We have a better idea.”

Deficits rose dramatically during the Bush administration. But Republicans are trying to assign blame to the Democratic Congress; Democrats have held majorities in the House and Senate since 2007.

House Republicans say they will offer a full alternative to the president’s budget, though the same may not happen in the Senate, where GOP leaders say they’re more inclined to offer point-by-point amendments.

Brady, a deputy Republican whip who serves on the House Ways and Means Committee, said the congressional versions of the budget aren’t really improvements on the president’s request.

Though the GOP alternative has little chance of passing, Republicans will be offering up their vision, he said.

“You see in [the president’s] budget major tax increases both on the middle class, on those who invest and save, a lot on small businesses,” Brady said. “And when you see the price that average families have to pay for this cap and trade — this climate-change legislation that’s in his budget — it’s gonna go through the roof.”

“We take the opposite approach,” he added. “We avoid this controversial cap and trade, a program that raises taxes on the middle class. I think Democrats here say they want to control spending, but looking at the budget, looking at the stimulus, looking at how they voted on the omnibus bill, man they’re spending and borrowing just as much as the president.”

Obama Budget Chief: Numbers Looking Worse

ABC News’ Teddy Davis reports:

President Obama’s budget chief said Tuesday that he expects a forthcoming government revenue estimate to reflect a worsening economic picture.

“The numbers will be more negative than anticipated,” said Peter Orszag, the director of the Office of Management and Budget, referring to a “re-estimate” that will be released later this week or early next week by the Congressional Budget Office. Orszag expects the CBO numbers to show declining government revenue because the fourth quarter of 2008 came in “much weaker than anticipated” and that information was not factored into CBO’s earlier estimates.

Orszag made his comments during a pen-and-pad lunch with reporters in Washington, D.C., sponsored by the Christian Science Monitor. He was asked to explain comments made earlier in the day by President Obama following his meeting with the Democratic chairs of the House and Senate Budget Committees.

Without specifically identifying which numbers he was referring to, Obama said, “We’re going to get some numbers with respect to the budget that may make this even tougher in the coming couple of weeks.”

During the hour-long lunch at the St. Regis Hotel, Orszag also touched on health care, cap-and-trade, taxes, and Social Security.

On whether the Obama administration will use the budget reconciliation process to overhaul the nation’s health care system, Orszag left the Obama administration room to maneuver.

“On reconciliation, I’m just going to say again what we’ve already said which is that it is not where we would like to start but it’s premature to be taking it off the table at this point,” said Orszag. “We’d like to avoid it if possible,” he added, “but we’re not taking it off the table.”

He said the Obama administration would like to see if there is some other way to get done important legislation without using the budget reconciliation process which makes it possible to circumvent the usual requirement to get 60 votes in the Senate. In a nod towards those who think Obama should use the budget reconciliation process to ensure that his agenda does not get bottled up in the Senate he said the process is used more often than critics like to acknowledge.

Asked if Obama is committed to finding a different $525 billion revenue enhancer over eight years to pay for his “Making Work Pay” tax credit if the Senate refuses to consider cap-and-trade as part of the budget, Orszag sidestepped the question.

“I think I’m not going to be negotiating with myself and undertaking hypotheticals,” said Orszag. “We’ve put forward a way of financing Making Work Pay and that’s what we favor.”

He also sidestepped a question about whether the Obama administration would funnel money to industries hit hard by cap-and-trade.

On Social Security, he said “changes will be necessary” to the nation’s retirement program. He emphasized, however, that the single most important thing the U.S. could do to put itself on a firm financial footing is to reform health care.

With regards to tax policy, he rejected GOP criticism that Obama is raising taxes in the middle of a recession by saying that the tax hikes don’t come until 2011 when he expects the US to be out of its recession. He also rejected the argument that higher marginal tax rates on the richest two or three percent hurt growth, pointing to former President Clinton’s experience in 1993.

“A lot of the doom and gloom that you’re hearing is exactly the same set of arguments that were made in 1993,” said Orszag.

ABC News’ Ferdous Al-Faruque contributed to this report.