Obama may find Europe reticent on some US goals

WASHINGTON – President Barack Obama's first European trip could dampen his hopes that a new diplomatic style will convert once-reluctant allies into cooperative global partners.

From taking in Guantanamo Bay prisoners to sending more troops into Afghanistan's most difficult regions and spending their way out of economic crisis, European nations remain reticent about some of the toughest U.S. priorities.

Obama jets across the Atlantic on Tuesday on an eight-day, five-country trip that will be dizzying even by the usual peripatetic standards of presidential foreign travel.

He will attend international summits on complex, urgent topics — the global financial meltdown and the fight against terrorists in Afghanistan and Pakistan. He plans individual meetings with leaders important to U.S. strategic interests, from nations including Russia, China, Britain, France, Germany, South Korea, Saudi Arabia and India. Obama also will make his first stop in a Muslim nation, Turkey.

Wildly popular around the globe but relatively inexperienced in foreign affairs, Obama also will squeeze in a Buckingham Palace audience with Queen Elizabeth II, joined by his wife, Michelle; deliver a speech in France on the trans-Atlantic relationship and an address in Prague on weapons proliferation; and holding a round-table session with students in Turkey.

When Obama went to Europe last summer as a presidential candidate, he was received like a rock star and his welcome this time is expected to be no less enthusiastic.

Since taking office, Obama has made down payments on several campaign promises that had endeared him to Europe, such as addressing global warming, ending the Iraq war and closing the U.S. prison camp at Guantanamo Bay, Cuba. Each had stoked acrimony toward former President George W. Bush.

Obama unveils agenda for first overseas trip

WASHINGTON – As President Barack Obama embarks on his first overseas trip as president, he is vowing to listen to his foreign counterparts and lead by example when world powers meet in Europe this coming week to address the economic crisis and work to stem future financial catastrophes.

Obama's jam-packed agenda includes a speech in France on the U.S. trans-Atlantic relationship. He'll deliver another one in the Czech Republic on proliferation. Then he's off to hold a roundtable in Turkey with students. He also has plans to meet with Saudi Arabia's King Abdullah, as well as a slew of other heads of state as part of a rigorous schedule.

"It's an opportunity ... to not just confront the inherited challenges that the administration took on, but also to re-energize our alliances to confront the looming threats of the 21st Century," said Denis McDonough, the administration's deputy national security adviser for strategic communications.

While economics certainly will dominate discussions, advisers said nuclear proliferation, cyber threats, climate change, energy security, terrorism, and Obama's new strategy for Afghanistan and Pakistan also will be discussed at G-20, European Union and NATO gatherings.

Thus far, Obama's only foreign trip as president was a daylong visit to Canada.

As a White House candidate last summer, Obama traveled to the Middle East and Europe in what was then his first high-profile step onto the international stage. He drew huge crowds everywhere he went, including an enormous one estimated at more than 200,000 in Berlin.

Expected to be gone nearly a week, the president leaves Washington on Tuesday for London to take part in the economic summit of 20 major and developing nations that together represent more than 85 percent of the global economy. Advisers said the goal was to manage the current crisis by restoring growth and to prevent a future downturn by reforming financial regulations.

"The president and America are going to listen in London as well as to lead," White House spokesman Robert Gibbs said.

Discussions are expected to be intense as there are wide differences between the U.S. and Europe over how to stabilize and grow economies.

While in London, Obama plans meetings with British Prime Minister Gordon Brown, Chinese President Hu Jintao, Russian President Dmitry Medvedev, Queen Elizabeth II, and Conservative Party leader David Cameron. Obama is also scheduled to meet with Saudi Arabia's Abdullah, Indian Prime Minister Manmohan Singh and South Korean President Lee Myung-bak.

Later in the week, Obama is slated to travel to Strasbourg, France, and Kehl, Germany, where he will meet with French President Nicolas Sarkozy and German Chancellor Angela Merkel, and participate in a NATO working group. He also will deliver an address on the United States' trans-Atlantic alliance and take questions from students.

More NATO meetings are on tap for the weekend before Obama flies to Prague, capital of the Czech Republic, for a European Union summit. He is slated to hold talks with Czech Republic President Vaclav Klaus, former Czech President Vaclav Havel and prime minister Mirek Topolanek, who resigned Thursday after his three-party coalition government lost a parliamentary vote of no confidence.

Also in Prague, Obama plans to deliver a speech on nuclear proliferation.

He then will travel to Ankara, Turkey, where advisers said Obama will make clear that Turkey is a "vital" member of NATO and a close ally of the United States.

While there, he plans meetings with Turkish President Abdullah Gul and Prime Minister Recep Tayyip Erdogan before holding a round-table in Istanbul on Tuesday with students in what advisers called an attempt to reach out to young people in Europe and Southwest Asia.

Obama seeks to rein in Wall Street, broaden agenda

WASHINGTON – President Barack Obama and congressional Democrats are stepping through an economic minefield and sowing the ground with unprecedented initiatives that capitalize on the recession to rein in Wall Street and broaden government's reach.

Nothing better illustrated this watershed than the bustle and scope of the past few days.

Obama's treasury secretary, Timothy Geithner, touched off a Wall Street rally with a long-awaited plan to help rid banks of their toxic assets. Geithner rolled out a comprehensive overhaul of financial regulations in hopes of avoiding another meltdown. Congressional Democrats worked to put their own imprint on a budget full of ambition but saddled with deficits.

In each case, the policies showed a pumped up role for government: leveraging money from the private sector, taking over troubled institutions, better governing ever-expanding financial markets, and promising greater influence over health care, energy and education.

Just as government proved it could flex its muscle, it also showed where it could wilt.

After days of fuming over bonuses paid by insurer American International Group Inc., Obama and members of Congress checked their tantrums and moved on. The House and Senate budgets embraced Obama's policy priorities, but lawmakers delayed difficult decisions on how to pay for them.

The flurry coincided with and was partly motivated by Obama's first overseas trip, which starts with a stop in London for an economic summit Thursday of 20 major and developing nations. There are wide differences between the U.S. and Europe over how to prime economies. Also, China has suggested replacing the dollar with a new global currency.

"We're kind of at a critical point," says former Rep. Mickey Edwards, an Oklahoma Republican and Princeton University lecturer.

"Proposals that are being made are to have the U.S. government much more involved in financial and business decision making," Edwards said. "Whether it's leading up to the G-20 and saying how do we reassure the rest of the world of our leadership, or how do we have a regulatory system that works with what the world looks like now — it's a big moment."

Obama's heaviest lifting came last week as he worked to save his domestic priorities and accommodate deficit-conscious Democrats while also standing squarely behind Geithner's bank rescue and financial regulation plans.

In the face of withering criticism from Republicans, who say his budget borrows, spends and taxes too much, Obama has used the economic crisis to justify his long-term fiscal blueprint, even though his own forecasts envision the country out of the recession by 2011.

"This budget is inseparable from this recovery, because it is what lays the foundation for a secure and lasting prosperity," he said during his prime-time press conference Tuesday.

Sen. Judd Gregg, the top Republican on the Senate Budget Committee, used his party's weekly radio address Saturday to slam Obama's grand spending plans. "We believe you create prosperity by having an affordable government that pursues its responsibilities without excessive costs, taxes or debt." said Gregg, R-N.H.

House and Senate budget writers trimmed some of Obama's spending proposals, cut his budget outlook from 10 years to five years, and refused to endorse administration plans for fees on greenhouse gas emissions and limits on tax deductions for wealthier earners. Still, they at least gave a symbolic endorsement of Obama's call to begin an overhaul of health care, reduce dependence on foreign oil and confront global climate change, leaving the politically crunching details for later.

The Democrats' budget plans also jettisoned $250 billion in spending that Obama had included in his budget as a placeholder for future bank rescues.

Geithner signaled the possibility of seeking more money when he spelled out a public-private partnership designed to leverage up to $1 trillion in purchases of such assets. But the request does not appear imminent. "We will work with the Congress to try to make sure that there are enough resources over time to do this right," he said.

The asset-purchase plan is certainly risky and could mean billions in losses for taxpayers. But it could rescue the banks and make money for both the government and the private investors down the road. That, at least, is Geithner's bet. And the stock market was, for the moment, betting with him. The Dow Jones industrial average shot up nearly 500 points the day of his announcement.

Covered in the afterglow, Geithner rolled out proposed rules for the financial sector, restructuring what many believe is a corroded regulatory framework dating back to the days of Franklin D. Roosevelt.

Geithner called for an entity that could seize large failing institutions, much like the Federal Deposit Insurance Corp. can take over banks. His plan also would set up an overarching authority to monitor Wall Street risk-taking and oversee markets that have operated in the shadows, such as hedge funds and exotic financial products.

As with the budget, the administration is capitalizing on the financial crisis to push for robust new rules. "We have a moment of opportunity now," Geithner said, "and we don't want to waste this opportunity."

Rob Shapiro, a former economic adviser to President Bill Clinton, said the question for the administration is how far it can push the sense of urgency before the public, and by extension Congress, becomes wary of the cost and perceives government intervention as intrusion.

"The hardest problem that they face, and consequently the country," said Shapiro, of NDN, a think tank formerly known as the New Democratic Network, "is the separation between what might be economically necessary and what is politically acceptable.

Obama says US economy sound, reassures investors

WASHINGTON – President Barack Obama on Saturday downplayed divisions between the U.S. and Europe over how to tackle the world's financial crisis and said China should have "absolute confidence" that its sizable investments in the United States are safe.

In a conversation focused heavily on the economy, Obama met in the Oval Office with Brazilian President Luiz Inacio Lula da Silva. It was the latest in a series of talks the president has had with his counterparts around the world before a pair of international meetings where the economic crisis will dominate.

Both leaders will attend the Group of 20 countries summit in London on April 2, and the Summit of the Americas in Trinidad in mid-April.

Obama said the notion that the U.S. and Europe are already taking sides, with America pushing for more stimulus spending and European nations favoring tighter regulation of the financial industry, is a "phony debate."

"I can't be clearer in saying that there are no sides," Obama told reporters after the meeting. He said a full range of approaches, including stimulus spending such as his own recently enacted $787 billion package, and financial regulation, are needed to help revive the global economy.

Financial regulation "is front and center" among the issues he wants to deal with, he said.

"In my mind, at least, there is no conflict or contradiction between the positions of the G-20 countries and how we're going to be moving forward," Obama said, adding that differences in details were being worked out. "I expect to have a productive meeting."

Treasury Secretary Timothy Geithner, who had pushed for Europe to match Washington's $787 billion package of spending and tax cuts, said Saturday that there was "broad consensus globally on the need to act aggressively to restore growth to the global economy. Geithner spoke in London at a prepratory meeting of finance officials from the rich and developing G-20 countries

Obama speaks of ending cycle of job losses

COLUMBUS, Ohio – President Barack Obama says he won't accept a future of job losses for the United States.

Addressing a graduating class of new police officers in Ohio, the president talked about Friday's grim government report — a spike in the unemployment rate to 8.1 percent and 651,000 jobs lost in February.

Obama said the job numbers underscore the importance of his economic stimulus package that Congress passed with just a few Republican votes.

He said some critics called the plan unwise and unnecessary. He said government leaders have a responsibility to act for future generations.

Obama said the nation has met every challenge with bold action and big ideas and "that's what fueled a shared and lasting prosperity."

Obama challenges lobbyists to legislative duel

WASHINGTON – President Barack Obama challenged the nation's vested interests to a legislative duel Saturday, saying he will fight to change health care, energy and education in dramatic ways that will upset the status quo.

"The system we have now might work for the powerful and well-connected interests that have run Washington for far too long," Obama said in his weekly radio and video address. "But I don't. I work for the American people."

He said the ambitious budget plan he presented Thursday will help millions of people, but only if Congress overcomes resistance from deep-pocket lobbies.

"I know these steps won't sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they're gearing up for a fight," Obama said, using tough-guy language reminiscent of his predecessor, George W. Bush. "My message to them is this: So am I."

The bring-it-on tone underscored Obama's combative side as he prepares for a drawn-out battle over his tax and spending proposals. Sometimes he uses more conciliatory language and stresses the need for bipartisanship. Often he favors lofty, inspirational phrases.

On Saturday, he was a full-throated populist, casting himself as the people's champion confronting special interest groups that care more about themselves and the wealthy than about the average American.

Some analysts say Obama's proposals are almost radical. But he said all of them were included in his campaign promises. "It is the change the American people voted for in November," he said.

Nonetheless, he said, well-financed interest groups will fight back furiously.

Insurance companies will dislike having "to bid competitively to continue offering Medicare coverage, but that's how we'll help preserve and protect Medicare and lower health care costs," the president said. "I know that banks and big student lenders won't like the idea that we're ending their huge taxpayer subsidies, but that's how we'll save taxpayers nearly $50 billion and make college more affordable. I know that oil and gas companies won't like us ending nearly $30 billion in tax breaks, but that's how we'll help fund a renewable energy economy."

Passing the budget, even with a Democratic-controlled Congress, "won't be easy," Obama said. "Because it represents real and dramatic change, it also represents a threat to the status quo in Washington."

Obama also promoted his economic proposals in a video message to a group meeting in Los Angeles on "the state of the black union."

"We have done more in these past 30 days to bring about progressive change than we have in the past many years," the president in remarks the White House released in advance. "We are closing the gap between the nation we are and the nation we can be by implementing policies that will speed our recovery and build a foundation for lasting prosperity and opportunity."

Congressional Republicans continued to bash Obama's spending proposals and his projection of a $1.75 trillion deficit this year.

Almost every day brings another "multibillion-dollar government spending plan being proposed or even worse, passed," said Sen. Richard Burr, R-N.C., who gave the GOP's weekly address.

He said Obama is pushing "the single largest increase in federal spending in the history of the United States, while driving the deficit to levels that were once thought impossible."

Combative Obama vows to fight for his budget

WASHINGTON (Reuters) – A combative President Barack Obama warned on Saturday he was bracing for a fight against powerful lobbyists and special interests who sought to pick apart the $3.55 trillion budget he wants to advance his agenda of reform.

Obama's spending blueprint, with its massive $1.17 trillion deficit and tax hikes on the wealthy, seeks to squeeze billions of dollars in savings out of current spending through competitive bidding among health insurers and ending subsidies and tax breaks for banks, agribusiness and oil companies.

"These steps won't sit well with the special interests and lobbyists who are invested in the old way of doing business," the president said in his weekly radio address.

"I know they're gearing up for a fight as we speak," he said. "My message to them is this: So am I."

Republicans, in their radio response, warned that Democratic spending priorities threaten to destroy the American dream that hard work can build a better life for each successive generation of citizens.

"This week, the president submitted to Congress the single largest increase in federal spending in the history of the United States, while driving the deficit to levels that were once thought impossible," said Senator Richard Burr.

He said Obama's budget commits the government to a billion dollars a day in interest on the debt over the next decade.

"Now, instead of working hard so our children can have a better life tomorrow, we are asking our children to work hard so that we don't have to make tough choices today," Burr said.

Obama said his budget blueprint delivered on the changes he promised in his election campaign: tax cuts for 95 percent of working Americans, a rollback in tax breaks for people making over $250,000, lower healthcare costs, education reform and an expansion in the use of clean, renewable energy.

The president said his budget also reflected the fact the United States faces a financial crisis, a costly recession and a trillion dollar deficit.

"Given this reality, we'll have to be more vigilant than ever in eliminating the programs we don't need in order to make room for the investments we do need," he said.

He said a page-by-page examination of the federal budget had already identified $2 trillion in potential savings over 10 years.

"I realize that passing this budget won't be easy," Obama said. "Because it represents real and dramatic change, it also represents a threat to the status quo in Washington."

The insurance industry would not like having to bid competitively to participate in the Medicare coverage program for the elderly, but it is needed to protect the program and reduce costs, Obama said.

He said banks and big student lenders would not like losing their taxpayer subsidies, but it would save nearly $50 billion and make college more affordable.

And he said oil and gas companies wouldn't like losing $30 billion in tax breaks, but it was needed to fund renewable energy research.

"The system we have now might work for the powerful and well-connected interests that have run Washington for far too long, but I don't. I work for the American people," Obama said.

"I didn't come here to do the same thing we've been doing or to take small steps forward, I came to provide the sweeping change that this country demanded when it went to the polls in November."