Obama defends recovery efforts

WASHINGTON -- Confronting misgivings in his own party, President Barack Obama mounted a stout defense of his blueprint to overhaul the national economy yesterday. He argued that delay on health care, energy and education would make "recovery more fragile and our future less secure."

The president's wide-ranging proposals in the midst of an economic crisis faced skepticism from Democrats and Republicans, as senators questioned his long-term budget outlook and the deficits it envisions in the middle of the next decade.

Sen. Kent Conrad, chairman of the Budget Committee, called the track of future deficits unsustainable and singled out Obama's proposal for spending $634 billion on health care during the next 10 years.

"Some of us have a real pause about the notion of putting substantially more money into the health-care system when we've already got a bloated system," said Conrad, D-N.D.

Treasury Secretary Timothy Geithner, testifying before Conrad's committee, also encountered blunt questions about the administration's plans for shoring up the nation's banks. He reiterated the administration's goal to lay out a private-public partnership to make up to $1 trillion in financing available to help banks clear their books of toxic, mortgage-related assets that have led to a national credit freeze.

Meanwhile, House Speaker Nancy Pelosi, D-Calif., played down talk that Democrats would consider a second economic-stimulus bill. "It's just not something that, right now, is in the cards," she said.

The flurry of comments illustrated the complicated moving parts confronting Washington as the economy continues to decline, credit remains clogged, and a new president advances broad and expensive initiatives.

The money set aside to address those needs so far has been staggering -- $787 billion for an economic stimulus designed to save and create jobs; the $700 billion approved by Congress for the financial rescue package; and hundreds of billions more through programs from the Federal Reserve Bank.

On top of that, Obama wants to overhaul health care, reduce greenhouse-gas pollution, and undertake major changes in energy policy. He's projecting a federal deficit of $1.75 trillion this year, by far the largest in history, but says he can reduce it to $533 billion by 2013.

"I am not choosing to address these additional challenges just because I feel like it, or because I'm a glutton for punishment," Obama told the Business Roundtable, a group of top business executives. "I am doing so because they are fundamental to our economic growth, and to ensuring that we don't have more crises like this in the future."

Obama said his health and energy changes would build a foundation for lasting recovery, arguing that the current economic crisis was precipitated by an "illusion of prosperity." He told the business leaders he wants government to "right the ship" and then "let private enterprise do its magic."

Critics of Obama's budget, such as Sen. Judd Gregg, R-N.H., complained the spending blueprint does not tackle the rising costs of Social Security and Medicare. Geithner said the administration intends to confront higher health-care costs with broad changes that will lower Medicare spending.

Separately yesterday, Obama admonished a gathering of state officials to spend stimulus money wisely. "If we see money being misspent, we're going to put a stop to it," he said.

If wasteful spending is found, "We will call it out and we will publicize it," he said, reiterating what he already has told governors and mayors.