Can Obama Keep Moderate Dems in Line on His Budget?

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From left: Justin Sullivan / Getty; Aude Guerrucci / Pool / Getty; Scott Olson / Getty

From left: Senator Evan Bayh, President Barack Obama and Senator Joe Lieberman

First there was last winter's $168 billion economic stimulus package, followed by a $300 billion fund in June to help distressed mortgage holders. Then came $350 billion for the banks (and a little of that for the car companies), another $350 billion for the banks, $787 billion in economic stimulus and $410 billion in an earmark-packed spending package for fiscal 2009 that Congress passed on Tuesday. Dizzy? A little nauseous? So are the moderate Democrats in Congress who are usually the gatekeepers of the federal piggy bank — the same fiscal conservatives who helped lead the bipartisan coalition in the Senate that held up and scaled down the Administration's stimulus plan.

Which is probably why President Barack Obama has gone out of his way to court these moderates, whose votes he desperately needs to pass the biggest bill yet: his $3.6 trillion 2010 budget resolution. Ever since the President laid out the broad outlines of his ambitious budget, moderate Democrats like Indiana Senator Evan Bayh and Tennessee Representative Jim Cooper have been struggling with how to embrace such a large budget on top of all the money that has already been spent; those who are up for re-election next year may be particularly inclined to vote against the budget because of voter anger, which thus far seems directed solely at Congress rather than the popular President. As a result, Obama and his Administration rarely let a day go by without underscoring their commitment to fiscal responsibility — just as soon as they can afford it. "Of course, like every family going through hard times, our country must make tough choices," Obama said on Saturday in his weekly radio address. "In order to pay for the things we need, we cannot waste money on the things we don't."

As a nod to moderate concerns, Obama took steps to make his budget more transparent, a point his team never tires of pointing out. He included items that President George W. Bush did not to obscure the true operating cost of the government, such as the money for the wars in Iraq and Afghanistan, an annual multibillion-dollar fix of the fees that Medicare pays physicians and Alternative Minimum Tax relief for the middle class. "At least the budget that the Obama Administration presented, even though it's huge and it's a huge deficit — and that enables the other team to beat up on it — the truth is that it's honest and truthful," says Representative John Tanner, a Tennessee Democrat and member of the so-called Blue Dog group of 47 fiscally conservative Dems in the House, six of whom voted against Obama's stimulus plan. (See who's who in Obama's White House.)

But at a time when the government is already shelling out trillions to avert a full-fledged depression, Obama's budget also lays down the foundations of much of his agenda — from large expansions in education funding to universal health care and a green-jobs program. To ease the way for moderates who may not be wild about spending $634 billion on health-care reform or $656 billion on renewable energy, Obama is also waging a public relations war, portraying the outlays as down payments that will save money in the long run. Fiscal conservatives have long drooled over the possibility of taking a scalpel to the fat in Medicare and Medicaid. They were delighted when Obama controversially included $1.1 billion in the stimulus to study the cost effectiveness of the programs. "Health care is the most important part of entitlement reform," says Cooper, "so in a sense, he's advancing strongly on the most important element." (Read TIME's cover story "The Health Care Crisis Hits Home.")

Bayh, who along with Nebraska Democrat Ben Nelson and Connecticut independent Joe Lieberman is one of the so-called Gang of 15, a coalition of moderate Democratic Senators, says it's all about the message: everything should circle back to the perilous economy. "Like getting health-care costs under control is important to the economy, and getting the deficit down," he says. "Sustainable sources of energy at reasonable prices is also important to the economy. Dealing with the financial crisis is obviously important to the economy. So what needs to be done is, Obama's got to move on all these fronts but also integrate them back to the same theme of always strengthening the economy, getting people to work, growing businesses, improving our standard of living."

But getting the moderates on board is not just about selling the plan to the public — it will also involve a fair amount of arm-twisting and horse-trading. On Tuesday afternoon, according to, Obama told a gathering of moderate House Democrats not affiliated with the Blue Dogs, "I am a New Democrat," harking back to the centrist moniker coined by Bill Clinton.

Still, no matter how much charm Obama piles on and how popular the President or his agenda is nationally, politicians aren't likely to back anything that hurts their constituents. The bill could well hinge on tiny provisions that members want to see removed or modified. Nelson is already opposing Obama's budget because of education provisions that would end federal support for private student loans and divert the money into grants. NelNet, a private student-loan company in Lincoln, Neb., employs 1,000 people and could go out of business if the budget is enacted as Obama envisions it, Nelson points out. "I think it'd be the wrong direction for people to outsource jobs from Lincoln, Neb., to Washington, D.C. It'd be pretty hard for me to vote for it the way it is."

And Obama can expect that moderates will insert some sturdy leashes on his spending down the road. "There'll definitely be movements by moderate Democrats to impose fiscal responsibility," says Lieberman. "I'm not sure what form it'll take, but we'll start to try to cut back and also put some brakes in place as we go on."

Presidential budgets are traditionally a first offer in what has to be one of the highest-stakes negotiations in the world. Obama fully expects to not get everything he wants — his proposal to lower the rate of tax deductions for the wealthy looks to be dead on arrival — just as many moderates will likely have to hold their nose to vote for it. And now that they have the country's financial woes laid out before them, next year they are hoping to take out the knives. "At least this way people see the magnitude of the problem," says Representative Allen Boyd, a Florida Democrat and one of the leaders of the Blue Dogs. "You can't solve a problem until you are willing to admit what the problem is and put it in your plan."

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