Grassley urges spending freeze on 'socialist' trend

Sen. Charles E. Grassley, Iowa Republican, also said the president is pursuing a "socialist" form of government that will stifle the free market.

Mr. Grassley told editors and reporters at The Washington Times that a spending freeze is necessary to get the federal deficit under control and to show voters that the government is capable of living within its means in hard times.

"What you get when you have an across-the-board freeze is everybody is seen as contributing something," Mr. Grassley said.

"Congressmen don't get an increase in [pay], government pensions don't go up, you don't charge senior citizens more for their Medicare premium than you did the year before," he said, adding that a three-year freeze would produce a more dramatic effect.

As the ranking Republican on the Finance Committee, Mr. Grassley figures to play a central role in the fate of some of the president's top priorities, including tax reform, health care and energy. Mr. Grassley's collegial relations with Chairman Max Baucus, Montana Democrat, only increases his clout.

He called for the freeze after Mr. Obama pushed through a $787 billion stimulus plan and proposed a $3.5 trillion 2010 budget, both with major spending programs designed to jump-start the economy and fund Mr. Obama's major policy goals.

Mr. Grassley, a five-term senator and noted deficit hawk, said Mr. Obama's promises to scrutinize congressional budgets and cut waste would barely make a dent in the projected deficits.

"Over a period of time, there's something predictable about a freeze, and over a period of time it makes a big difference," said Mr. Grassley, who noted that he had backed a similar freeze in the mid-1980s under President Reagan. "The multiplier effect of freezing something for three years is very dramatic."

In often pointed language, Mr. Grassley called Mr. Obama's spending plans a "trend toward socialism" that will undermine the private sector.

Asked whether the Democratic Party should be renamed the "Democratic-Socialist Party," Mr. Grassley said, "I think it would be harmful to rename the party, but it wouldn't be harmful to say there's a big trend toward socialism within this budget."

He noted that the federal tax take - which averaged 18 percent of gross domestic product for two generations - would rise above 20 percent under Mr. Obama's plan, coupled with massive deficits for at least a decade. The result: The federal government would take command of an ever larger share of the economy.

"Whenever the government does more, there's less for the private sector to do," he said. "That's a movement toward socialism."

He criticized the new president for what he said was a retreat on campaign promises to run an open and transparent government, citing Mr. Obama's use of a presidential "signing statement" on the recent stimulus law to curb protections for federal whistleblowers.

"I'm just telling you a president who said he was going to be the most transparent president, the most open president, ought to stick with it," Mr. Grassley said. The signing statement was "completely contrary to what he said in the campaign."

While saying he was open to working with the new president on key agenda items such as health care, the five-term conservative lawmaker directly attacked Mr. Obama on several fronts, from his handling of the economic crisis and relations with Congress to taking time to predict the winners of the national college basketball tournament live on national television.

"We should just be asking the president to not be a showman, to be [with "Tonight Show" host Jay] Leno or other things that detract from what he's doing, like bracketing the NCAA game. Those are distractions," he said.

Mr. Grassley said the higher taxes and deficits in Mr. Obama's budget outline were making even some Democrats nervous, even before the Congressional Budget Office released sharply higher new deficit projections Friday.

"I heard some real nervousness even before Friday on the part of a lot of Democrats, and I bet you will really hear it in the House of Representatives with Blue Dog Democrats," he said.

Mr. Grassley said it was likely that some of the Bush tax cuts will be allowed to expire and a plan to fund Mr. Obama's energy cap-and-trade proposal will pass over Republican opposition. He said Mr. Obama would have a tougher time with his proposals to curb deductions on charitable giving and mortgage interest for higher-income taxpayers.

He also expressed doubts that the Senate tax-writing panel will pass Mr. Obama's proposals to end oil and gas drilling tax breaks worth about $30 billion.

"I don't think they'll be removed," he said.

The one element of the Obama tax proposal that should be considered, he said, was a plan to impose new excise taxes on offshore production in the Gulf of Mexico. The plan is designed to close loopholes that have given what the administration calls "excessive royalty relief" to oil producers.

On health care reform, Mr. Grassley said, "Health care is going to be a bipartisan issue. Increasing taxes to pay for it I don't think is going to be bipartisan."

Still, he said, "right now everything is on the table" as he and Mr. Baucus push for a bill that can pass the Senate Finance Committee in June and reach the Senate floor by July.

The schedule is "pretty ambitious, but if you don't start out with that attitude, you'll never get it done," he said.

The lawmaker grew particularly agitated over Mr. Obama's March 10 signing statement - after Mr. Obama severely criticized such statements under President Bush. Mr. Obama expressed reservations over a whistleblower protection provision that Mr. Grassley has long championed.

Mr. Obama was resistant to a "rider" to the stimulus bill that had been included routinely on spending bills for more than a decade.

"I do not interpret this provision to detract from my authority to direct the heads of executive departments to supervise, control and correct employees' communications with the Congress in cases where such communications would be unlawful or would reveal information that is properly privileged or otherwise confidential," Mr. Obama wrote.

Said Mr. Grassley, "There seems to be an institutional disease within the executive branch of government under any president that says, 'We're going to drag our feet on anything Congress wants to know.' "

He vowed to continue his constitutional oversight role of the executive branch, saying he preferred to wage the fight "battle by battle rather than war by war."

"But this business of what he said in the signing statement, it's almost war," he said.