Key Senators Question Obama's Spending Plan

President Obama's ambitious new U.S. budget faced bipartisan skepticism Thursday as key senators questioned the administration's long-term budget outlook and the deficits it envisions rising in the middle of the next decade.

Treasury Secretary Timothy Geithner defended it in testimony before the Senate Budget Committee, saying current increases in spending are short term and will have to be substantially reduced to get the country back into fiscal shape.

Still, the Democratic chairman of the Budget Committee, Sen. Kent Conrad , called the track of future deficits "unsustainable" and singled out Obama's proposal for spending $634 billion on health care over the next 10 years.

"Some of us have a real pause about the notion of putting substantially more money into the health care system when we've already have a bloated system," he said.

Sen. Judd Gregg, a Republican, complained that the budget does not tackle rising entitlement spending on old age pensions and health care for the elderly. Geithner countered that the administration intends to confront rising health care costs with broad reforms that will significantly reduce spending.

Geithner is at the center of the president's economic policy, advocating both its budget proposals and its tax policies, but also a $700 billion rescue program for the financial sector.

Geithner was facing questions on all those fronts Thursday. By the end of the day, he was scheduled to leave for talks Friday and Saturday in London with finance officials from the Group of 20 nations.

Sen. Jeff Sessions, a Republican, dismissed Geithner's defense of the budget as "campaign mode."

"This budget is based on more taxes, more spending and more debt," Sessions said.

The president's budget would raise taxes, starting in 2011, on individuals earning more than $200,000 and on households earning more than $250,000. Geithner said the increases would kick in after the economy is expected to be in recovery.

But Geithner sidestepped a question by Sen. Mike Crapo, a Republican, who asked whether the administration would let the increases take effect if the economy has not recovered in two years. "We have to watch how the economy evolves," Geithner said.