President Obama goes before the American people Tuesday night to defend his economic recovery plan in a prime-time news conference.
After a week of bleak news for the president, his appearance will come during a rare economic bright spot for the administration: Markets rallied Monday in reaction to both Obama's bank stabilization plan and a spike in home sales.
But a day of good news can't erase the buffeting that Team Obama has been subjected to over the past few weeks. The president has faced outrage over AIG bonuses and calls for Treasury Secretary Timothy Geithner's head, and criticism over his own missteps during television appearances.
And the advisability of his ambitious budget plan has been called into question after the nonpartisan Congressional Budget Office on Friday released stunning federal budget projections that outpaced by trillions the administration's own estimates.
Despite the challenges, Obama is not expected to back off the hard sell he and his supporters have been making for his increasingly controversial $3.6 trillion budget proposal.
"We've still got a long ways to go, and we've got a lot of work to do," Obama said Monday about the nation's economy. "But, I'm very confident that, with the team that we've got assembled, we're going to be able to make it happen."
Budget Battle Brewing
The president could just as well have been referring to his ambitious budget plan, which he has resisted scaling back in the face of the CBO's daunting deficit projections and growing unease even among members of his own party.
Obama's budget proposal, which would remake the health care system and tackle big environmental and education issues, could result in a deficit over 10 years of $9.3 trillion --- $2.3 trillion higher than the White House estimated, the CBO reported.
According to the analysis, the administration overstated the speed of economic recovery — and the resulting revenue the Treasury can expect to collect.
Conservative "Blue Dog" Democrats in the House have already pushed back on the president's spending plan. In the Senate, which holds the key to the budget's success, leaders including Budget Committee Chairman Kent Conrad, a North Dakota Democrat, have been talking about billions of dollars in cuts to the president's plan.
Politico reported Monday that Conrad plans to cut up to half, or $28 billion, of Obama's request in increased appropriations for domestic and foreign aid programs in the coming year.
And as the budget negotiations heat up — the administration is looking for a consensus before the traditional Easter break next month — the other side of the aisle has launched a steady fusillade.
Including this: U.S. Sen. Judd Gregg, the New Hampshire Republican who for a brief time was Obama's commerce secretary nominee (before cold feet and political reality led to his withdrawal), said Obama's policy will lead the country to bankruptcy.
The Democratic National Committee on Monday e-mailed a video of Gregg responding to questioning about why Republicans have failed to propose an alternative to Obama's spending plan. "Well," Gregg said during an interview on CNN, "we only have 41 people in the Senate."
Meanwhile, a consortium of liberal groups, including Campaign for America's Future, said Monday that they plan to launch a "Dog the Blue Dogs" effort to spotlight House Democrats who are "blocking reforms President Obama promised during the campaign."
Economic 'Gallows Humor'
Obama is expected to face tough questions about the advisability of asking the American people to embark on his ambitious — and ambitiously expensive — journey in the face of such deficits.
He is also expected to be asked to explain his coolness toward the House measure that would punish AIG bonus recipients with a 90 percent tax on the bonus money. Obama has said he will not "govern out of anger."
He will no doubt be asked about the advisability of appearing on late-night comedy shows, following his chat with Jay Leno last Thursday — and about what critics have described as his flippant reaction Sunday on CBS' 60 Minutes to a question about the economy.
Correspondent Steve Kroft asked Obama if he was "punch drunk" after the president chuckled during a portion of the interview relating to the economy.
"There's gotta be a little gallows humor to get you through the day," the president said.
Obama no doubt felt some legitimate good humor Monday when stock indexes jumped 7 percent and the Dow closed nearly 500 points higher after he and his economic team, including Geithner, announced details of a public-private plan to buy up banks' "toxic assets" and auction them off.
It's part of the three legs in the stool of economic recovery, Obama said: the stimulus plan, the effort to stabilize the housing market, and, now, he said, the program to get bad assets off banks' books.
But doubts about whether those toxic assets have any value in the market — economists like Paul Krugman say no — leave open the question of the stability of that stool.
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