Financial sector bailouts, mortgage bailouts, and auto industry bailouts were only distractions from the Obama administration’s plans for hope and change, according to the AP:  Obama turns to budget, health care, entitlements

After focusing his first month on the economic mess he inherited, President Barack Obama now starts rolling out his own far-reaching agenda with a summit on fiscal policy, his first speech to Congress and the unveiling of his budget for 2010.

This coming week will mark a turning point from what Obama felt compelled to do, to what he wants to do. It also may test how much spending, change and ambition the American people and their elected officials can stomach in a short time.

On Monday, Obama will try to snap Washington’s collective mind-set back to fiscal restraint, just days after signing a record-breaking spending plan to stimulate the moribund economy. His afternoon-long “fiscal responsibility summit” at the White House is bound to set off sparks.

Did the reporter forget that the President was a sitting Senator while the events leading to the economic mess were in train?  And that a lot of the people in his administration were intimately involved in the financial industry as it was tanking?  Selective amnesia is so convenient.

Why would a summit on  fiscal restraint cause controversy?

Liberals worry that renewed attention to long-term deficits will stall their progressive agenda, which they don’t feel should suffer because of transgressions by banks, mortgage lenders and automakers. Some worry that Social Security is being unfairly lumped with Medicare’s more serious financial problems, and they are determined to squelch any hints of curbing benefits in the retirement program.

Conservatives worry congressional Democrats will live up to their reputation as free-spenders who ignore calls for restraint, sending the already soaring deficit into the stratosphere.

Sounds like liberals and conservatives have different definitions of fiscal restraint.

The Administration’s PR problem:

“If you are going to the country with hundreds of billions (of dollars) of fiscal stimulus, and hundreds of billions of financial-sector rescue, and now more for mortgages and more for the auto industry, it becomes very difficult for them to say, ‘And now for my real agenda: Health care expansion for hundreds of billions of dollars,” said Robert Bixby, executive director of the bipartisan fiscal watchdog group Concord Coalition.

“At that point the political system just chokes up,” he said.

I sure hope so.

During his campaign President Obama promised to control the costs of health care and prescription drugs and to make the industry more efficient, partly by facilitating the transfer of medical records to an electronic database.  Hey, wasn’t that part of the stimulus package?

The newly enacted $787 billion stimulus bill includes $19 billion to convert medical records to electronic forms, and $1.1 billion for research comparing which treatments work best for a particular disease.

Yes, it was.   And here I was, stupidly assuming the stimulus was supposed to stimulate the economy, not Obama’s health care vision.

Onward and downward:

Perhaps complicating his efforts, Obama has pledged a more honest budget process, which immediately will make the 10-year deficit look about $2.6 trillion larger than it would have otherwise. For instance, he is dropping the pretense that the government will receive huge revenues from the Alternative Minimum Tax, which everyone in Washington knows will be suspended.

“For many years, we’ve used tricks and gimmicks to mask the size of our irresponsibility,” White House press secretary Robert Gibbs said Friday.

Advice to Obama: It will take time.

Facing such eye-popping deficit numbers and the massive federal spending already gushing from the stimulus and bailout bills, people may need to catch their breath and survey Obama’s plans with a cooler, calmer gaze.

“A certain passage of time is going to be necessary now before the political climate catches up with the economic environment,” said James Galbraith, an economist at the University of Texas at Austin. “We just made what seems to many people to be a very large investment in reviving the economy.”

Nonetheless, he said, the stimulus package probably will be too small to deal with the economy’s rapid decline.

“If that’s the case,” Galbraith said, “there will be time to move larger measures that require more imagination and more initiative.”

Time will heal all wounds, especially when the small-minded realize the error of their ways.  I think it’s more likely that people will look back at this and damn all politicians to hell.  I’ve already started.

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