BUDGET BATTLES: Do You Smell Something Burning? (03/14/2006): By Stan Collender, NationalJournal.com
© National Journal Group Inc.
Tuesday, March 14, 2006:
Last week's budget events seem relatively insignificant when you look at them individually. Put them together, however, and you can't help but get the distinct feeling that more than one person in Washington is fiddling while the budget fire spreads.
Start with the House Budget Committee, which postponed its consideration of the fiscal 2007 budget resolution because, according to a variety of reports, Republicans have been unable to come up with a plan that would be approved either in committee or on the floor.
The committee may try to hold the markup this week, but the overwhelming expectation is that the earliest it will happen is after the St. Patrick's Day congressional recess at the end of March. There seems to be a growing concern among budget participants and watchers on Capitol Hill that it won't happen at all.
Next, move to the Senate Budget Committee, which last week adopted a fiscal 2007 budget resolution that, in the words of Chairman Judd Gregg, R-N.H., was totally "vanilla."
The resolution does allow the committee to say it is doing something, or at least something more than its House counterpart. However, it makes almost no policy choices and seems to please no one. It rejects virtually all of the proposals in the Bush budget, transfers $5 billion in spending proposed by the White House for the Pentagon to domestic programs, and has a 2007 deficit that is $5 billion higher than what the president projected.
To make matters worse, the Senate Budget Committee's vanilla budget resolution was adopted on a straight party-line 11 to 10 vote that portends big problems when it is debated by the full Senate this week. In fact, immediately after the resolution agreement was reached, Gregg was telling reporters that the votes might not exist in the Senate to pass what his committee had just adopted. Don't be surprised if the committee-approved resolution is never approved.
Next, move to the Treasury, which late last week reported that the federal government had its highest one-month deficit -- $119.2 billion -- in February.
It is generally unfair to use monthly results as an indication of what will happen through the year. In fact, the total 2006 deficit through the end of February was actually about $5 billion less than last year's deficit through the same period.
In addition, February is typically a month when the government runs a large deficit because individual taxpayers expecting money back generally file their returns early and the IRS issues significant refund checks. Therefore, the fact that there was a large deficit in February is not by itself a cause for alarm.
What is of concern, however, is that the February results were more because of additional spending rather than tax refunds. This is especially the case because spending for Iraq, Afghanistan, Katrina and Medicare will likely accelerate through the rest of the year.
That should plant some doubt in everyone's mind about the administration's claim that the deficit outlook is getting better. Not only is federal spending increasing but, at least judging by what the administration and budget committees are proposing, there doesn't seem to be much interest or ability to do anything about it.
Finally, move to the White House and Congress, where interest in a line-item veto seemed to be gathering bipartisan momentum last week. This happened a week or so after interest in a two-year budget also picked up some steam.
Although I have serious doubts about it being the magic elixir many others in the federal budget world think it will be, I have no problem with a line-item veto.
What is troubling, however, is the sudden interest in budget process changes. That typically happens when policymakers find it impossible to do anything about the budget itself and it's often used as an alternative to making progress. Representatives and senators tell constituents that things may look bad now, but they have taken steps to make sure it will get better in the future.
For the record, neither a line-item veto, a two-year budget, or any other process change that is likely to be enacted anytime soon will have much of an impact on the budget. If a consensus existed in Washington about what to do about the deficit, Congress and the White House wouldn't need a procedural fix to make it happen.
Budget process changes only work when there is a general agreement in advance about what to do, and that simply doesn't currently exist. If it did, the House and Senate Budget Committees this week would have been able to come up with a budget resolution that moved toward that goal.
The same thing can be said about the ongoing discussion about procedural changes that would make earmarks more difficult. Congress doesn't need a procedural fix for earmarks; it has the ability to stop them now just by deciding it wants to do so. The fact that it is considering a process change is a strong indication that it doesn't really want it to happen.
Put all of this together and you get the sound of more than one person in Washington fiddling while the budget is burning. Indeed, you almost start to hear a whole orchestra playing.
Republicans on Hill Resist Party Leaders' Spending Cuts: By Jonathan Weisman
Washington Post Staff Writer
Tuesday, March 14, 2006; A08:
House and Senate Republicans will seek this week to increase spending on port security, homeland defense, health care and education in a clash with GOP leaders struggling to regain the mantle of fiscal discipline for their party. With the Senate taking up a budget blueprint for 2007 and the House voting on a $91 billion emergency spending bill, lawmakers on both sides of the Capitol will face key tests of their budget-cutting mettle in the coming days.
The federal budget deficit is expected to reach $371 billion this year, despite robust economic growth. But GOP leaders insist they can bring down the deficit without increasing taxes if lawmakers are willing to make tough decisions on federal spending.
To that end, the Senate yesterday began debating a plan that would cap nondefense spending at Congress's discretion at $420 billion for the fiscal year that will begin on Oct. 1, $15 billion lower than the fiscal 2006 level.
Under the budget plan, discretionary spending on environmental and natural resource programs would fall 20 percent. Spending on community and regional development programs would be slashed by 32 percent, and politically sensitive transportation spending would be cut by 17 percent.
In the House, conservatives will push tonight to offset at least part of the emergency spending bill's cost with cuts elsewhere in the budget. Of the $91 billion in emergency spending, $19 billion is for additional hurricane relief for the Gulf Coast, a sum that some Republicans believe should be offset by cuts in other programs.
Those moves correspond with political statements from Republican leaders that the party is getting serious about containing government spending. A gathering of GOP presidential hopefuls in Memphis last weekend featured a stream of prominent Republicans lamenting the growth of government since President Bush took office and vowing to reverse the trend.
Those political statements, however, have not been backed by legislative action. Senate Budget Committee Chairman Judd Gregg (R-N.H.) conceded yesterday that a coalition of moderate Republicans and Democrats may block the adoption of the spending limits in his budget plan. Facing an election-year revolt, Gregg has already dropped the centerpiece of Bush's budget-cutting efforts for 2007, a $37 billion reduction in the growth of Medicare. And he opted against using in the budget resolution parliamentary language that would have helped Bush extend his first-term tax cuts beyond their 2010 expiration date.
"For the great majority in my conference, they'd like to do some aggressive things on spending," he said. "But we need 51 votes. You might have 48 votes, but that's not 51, and it's as simple as that."
Indeed, by week's end, Congress is likely to approve measures that would increase spending rather than decrease it. Rank-and-file lawmakers from both parties are increasingly convinced that budget cutting has gone far enough.
"We're beyond cutting the fat and beyond the bone. We're down to the marrow," said Sen. Arlen Specter (R-Pa.), who plans to introduce an amendment today to raise spending on health care, education and worker safety by billions of dollars above the president's request for next year.
Specter's amendment, co-authored by Sen. Tom Harkin (D-Iowa), is only the beginning. Sen. Joseph I. Lieberman (Conn.), the ranking Democrat on the Senate Homeland Security Committee, said he and Chairman Susan Collins (R-Maine) will introduce an amendment this week to broadly raise spending on homeland defense. Senate Democrats on their own will move to increase spending for homeland security by nearly $3 billion more than Bush's wishes.
Reps. Daniel E. Lungren (R-Calif.) and Jane Harman (D-Calif.) plan to unveil legislation today that would raise spending on port security by $801 million a year. That bill nearly equals a bipartisan Senate legislation that would raise annual port security spending by $835 million. Both bills are scheduled for quick action in the House and Senate homeland security committees in the coming weeks.
Proponents of the measures say the government has avoided such spending for too long under the guise of fiscal restraint. Three times since the Sept. 11, 2001, terrorist attacks, the House has voted against Democratic efforts to raise spending on port security. But in the wake of a Dubai company's effort to take over management responsibilities at six major U.S. ports, such opposition appears to be collapsing.
"There simply is no cheap way to be better prepared," Lieberman said yesterday.
If some Republicans are ready to reverse spending cuts, they are not prepared to reverse their tax cuts. Specter said labor, health and education programs were cut last year by $2.1 billion and lost an additional $5 billion in buying power because of inflation. He hopes to reverse all or most of those cuts. But he said that proposing tax increases to pay for that additional spending would only complicate his spending effort.
Budget experts said that kind of thinking is a ticket to ever-increasing deficits.
"No one is willing to sit down and come to grips with the fundamental problem that you can't run a 21st-century government on a 1950s revenue base," said Urban Institute President Robert D. Reischauer, a former director of the nonpartisan Congressional Budget Office.