The Daily Item, Sunbury, PA


February 14, 2013

Obama vow to not add dime to deficit leaves billions to be found


Alan Krueger, chairman of Obama's Council of Economic Advisers, said in a post-speech question-and-answer session on the White House website that Obama's budget proposal will spell out the costs and how to pay for them. He repeated the president's assurance that new spending proposals won't expand the deficit.

"He's staying within the agreed-upon limits of the budget control act," Krueger said, referring to the 2011 deficit- reduction law that Obama signed to lift the nation's debt ceiling. "The president has made clear he's willing to do the difficult spending cuts to make room" for the initiatives he wants, he said. There's a "high return for these kind of investments."

The president's initiatives will be shadowed by continuing uncertainty about the U.S. economy, which unexpectedly shrank by 0.1 percent during the final three months of last year raising questions about the recovery's strength.

Obama didn't make clear in his speech how he'll pay for the new programs, "and he will have to in the budget," said Alice Rivlin, a senior fellow at the Brookings Institution, a Washington policy group.

"He knows people are worried about the deficit and he wants to reassure them," said Rivlin, who's a former vice chairman of the Federal Reserve. "I don't think he reassured the policy wonks very well because he didn't spell it out."

On preschool access, she said, he offered "no specifics" about how the federal government would work with states. "That could be expensive or not, depending on how you did it," she said. "Hardly any states are rolling in money these days."

At the same time, Rivlin said, spending on infrastructure, job training and early education can help the economy.

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