Union Tribune

February 5, 2002

Spending blueprint calls on nation to embrace red ink

By FINLAY LEWIS and GEORGE E. CONDON JR. 
COPLEY NEWS SERVICE 

WASHINGTON By printing his budget between red, white and
blue covers, President Bush hoped to wrap a patriotic cloak
around his war-and-anti-recession agenda while downplaying
the significance of the red ink looming in the nation's future.

At its core, Bush's $2.13 trillion budget proposal represents a
spending plan that would pump tens of billions of dollars into
transforming the military, beefing up homeland security and
spurring economic growth.

True to his credentials as a fiscally conservative Republican, the
president's budget also attempts to defy the spending lobbies on Capitol Hill by proposing to scrimp on a range of domestic
programs not related to the war on terrorism.

But, with control of Congress hanging in the balance in the fall
elections, the greater likelihood is that lawmakers from both
parties will ignore those strictures and avoid the traditional
choice between guns and butter.

"I see it coming down to a spending fest," said Marshall
Wittmann, a congressional analyst at the conservative Hudson
Institute. "If you believe Congress is going to restrain itself in an election year, I know of a bridge in Brooklyn that's for sale."

The result of those spending decisions would be to worsen the
modest deficit projected by the administration's budget and to
complicate its longer-range plans for returning the Treasury to a
surplus.

That could represent a political opening for Democrats. Breaking
his long silence over the weekend, former Vice President Al Gore
blamed Bush for frittering away the strong economy he inherited
from President Clinton and for the projected disappearance over
the next decade of $4 trillion worth of surpluses.

Congressional Democrats for some time also have been making
the case that the reappearance of deficits has forced Bush and his GOP allies in Congress to raid the Social Security and Medicare trust funds to finance a Republican-backed tax cut for the wealthy.

Politically, most Democrats are realistic enough to understand
that no budget battle is going to topple the president from his
lofty perch atop the public opinion polls. But they think they can
use the upcoming debate to make several Republican members
of Congress more uncertain of their re-elections this November.

"Bush can afford to lose 10 points," said Democratic pollster
Mark Mellman. "It is easy for him to do some of these things. But it is going to be much harder for some of these Republicans
running in marginal districts to square these things."

But, there is also some reason to doubt the effectiveness of
deficits as a political issue, at least for the immediate future.

"In the short run the fallout will probably be limited because
most Americans have correctly concluded that deficits are
largely the result of the slowdown in the economy and the need
to boost spending on defense and homeland security," said
Robert Reischauer, former head of the nonpartisan
Congressional Budget Office and now president of the Urban
Institute.

Moreover, the deficits projected by Bush's budget are relatively
small: $106 billion for the current fiscal year and $80 billion for
next year. Measured as a percentage of the country's overall
economy, those shortfalls are less than a quarter the size of the
deficits during the last recession when Bush's father was in the
White House.

Appearing before cheering troops at Eglin Air Force Base in
Florida, the president yesterday all but dared congressional
Democrats to challenge his strategy for "winning this war."

In the days to come, Bush will barnstorm the country to build
popular support for strengthening defenses against terrorism
and enacting an economic stimulus plan that would include
additional tax cuts for individuals and businesses.

To partially offset the costs of those proposals, Bush would like
to impose a 2 percent lid on the spending growth for all
discretionary domestic programs not related to defense or to
securing the homeland. Those programs, which do not include
such mandatory obligations as Social Security and Medicare,
have grown in recent years at an annual rate of about 6 percent,
according to Mitch Daniels, director of the White House Office of
Management and Budget.

Stanley Collender, a long-time expert on the budget process,
said he expects the 6 percent trend to continue.

That is so, he said, because Bush's willingness to embrace red ink in order to finance his program amounts to a "free pass" on the deficit issue when Congress turns its attention to enacting
appropriations bills for next year.

In addition, he noted that legal ceilings that once limited the
government's ability to spend money on discretionary programs
have expired.

"That is an absolute formula for spending more, not less,"
Collender said.