Mixed spending messages from Obama

With the U.S. government racing toward $10 trillion in spending and loan guarantees to confront the recession, President Barack Obama on Monday will say it’s time to clamp down on federal expenditures.

Huh?

Obama’s decision to convene a “Fiscal Responsibility Summit” amid the current bailout bonanza might strike some as an act of sheer chutzpah, or at least some serious cognitive dissonance.

But policy analysts, deficit hawks and advocates of entitlement reform are looking past the somewhat jarring mixed messages. They say they’re just happy Obama is trying to call attention to the looming long-term problems.

“It’s very deliberately done on the heels of the orgy of spending, and with the understanding we’re going to have more of it,” said Norman Ornstein, a congressional analyst with the American Enterprise Institute. “We need triage now to prevent the huge disaster that comes with deflation, depression —something to alleviate the very considerable amount of pain people are in.”

On Monday, Obama will bring together more than 130 lawmakers, heads of advocacy groups and economists in the White House State Dining Room to lay out the bad news – a federal deficit of at least $1.3 trillion, the largest as a share of the nation’s economy since World War II. The fiscal summit is meant as a first volley in the battle to address runaway costs for Medicare, Medicaid and Social Security.

Obama and Vice President Joe Biden will address the 1 p.m. gathering, which will feature two presentations on the nation’s fiscal condition, one by Mark Zandi, an economist and former adviser to Obama’s presidential rival Sen. John McCain, and the other by Robert Greenstein, the executive director of the Center on Budget and Policy Priorities.

Later, the group will break up into five panels headed by Obama Cabinet members and top aides – on health care, taxes, Social Security, contracting and procurement, and the budget.

The White House is trying to keep expectations in check, with Press Secretary Robert Gibbs saying the summit is only a “first step in the process of beginning to lay out how we can bring down the deficit and put our economy back on sound financial footing.” In fact, the White House has signaled that policy decisions won’t be made at the summit.

Monday’s event is just the start of a full week of budget-focused talk by Obama, who addresses Congress on Tuesday and releases his first budget outline on Thursday. The goal is get the public looking beyond the current economic gloom by convincing them Obama has a plan, not only to cut the deficit in half by 2013, but also to use the budget to fund his top priorities in health-care, energy and education.

Still, the numbers boggle the mind. The nearly $10 trillion total comes from more than $1 trillion in stimulus and Wall Street bailout funds, $3 trillion in loans and spending by the Treasury, Federal Reserve and Federal Deposit Insurance Corp. and pledges and loan guarantees of $5.7 trillion more, according to Bloomberg.

One of the lawmakers who urged Obama to convene the summit, Rep. Jim Cooper (D-Tenn.), said it’s important for the president to press forward despite the short-term economic emergency.

“Say you have an obese patient who’s really sick, do you stop feeding the patient because they’re obese? You keep feeding them and cure the sickness,” Cooper told POLITICO. “It’s only superficially contradictory.”

Added Brian Riedl, a budget analyst with the Heritage Foundation: “I think very few people in Washington have very much credibility on fiscal responsibility after the last eight months, but that does make the discussion even more relevant.”

“If lawmakers are giving money to the National Endowment for the Arts to end a recession, then how do we expect them to make really tough decisions on Medicare, Medicaid and Social Security?” Riedl said.