[Mb-civic] Bush Looking at Freezing Domestic Spending

[Michael Butler]

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    Bush Looking at Freezing Domestic Spending
    The Associated Press

     Friday 17 December 2004
 Congressional aides and lobbyists say President Bush appears ready to
propose freezing or slightly cutting domestic spending.

    Washington - The White House is telling federal agencies to expect lean
budgets next year, with congressional aides and lobbyists saying President
Bush appears ready to propose freezing or even slightly cutting overall
domestic spending.

     Targeted would be all annually approved programs except for defense and
domestic security.

     Excluding those two would leave a part of the budget the administration
estimates will total $388 billion for the fiscal year that began October 1.
Also excluded are automatically made payments like Social Security and
interest on the federal debt.

     Bush's stringent approach comes as record federal deficits that hit
$413 billion last year hinder his ability to pay for overhauling Social
Security and extending his tax cuts. He also has tied the budget shortfalls
to the weakening dollar, and pledged to reduce red ink to help prop up the
currency.

     At his White House economic conference on Thursday, Bush said he made
"good progress" in holding the growth of non-defense, non-homeland-security
programs this year to about 1 percent.

     "What I'm saying is we're going to submit a tough budget," he said.
"And I look forward to working with Congress on the tough budget."

     The president is still making final decisions about the $2.5 trillion
budget for 2006 he will propose in February.

     But House and Senate aides, speaking on condition of anonymity, said
cuts appeared destined for such programs as housing, grants for community
development, purchases of new equipment for the Federal Aviation
Administration, and Army Corps of Engineers water projects.

     Even the National Aeronautics and Space Administration, an
administration favorite, was facing an increase of just 1 percent, pending
appeals to the White House by outgoing NASA Administrator Sean O'Keefe, a
lobbyist said.

     The zero-sum game that is federal budgeting means that if spending for
next year is held flat, for every dollar increase that administration
favorites like education or veterans receive, another dollar must be cut
elsewhere.

     Even a program receiving the same as this year would lose purchasing
power due to inflation, now running about 3 percent annually.

     Bush's spending blueprint would be among the toughest for domestic
programs since President Reagan's budgets of the 1980s.

     Overall domestic spending has grown every year but three since 1987 -
in 1995 and 1996, when Republicans first recaptured Congress, and in 2000,
immediately after a one-time influx of U.S. aid to help poor and debtor
countries.

     Even as domestic spending growth has slowed, overall expenditures
including defense and domestic security continue to climb, largely due to
the costs of wars in Iraq and Afghanistan.

     Congress approved $87.5 billion for those wars in fall 2003 and $25
billion more last spring, and Bush is expected to request another $75
billion to $100 billion early in 2005.

     As word of Bush's still-evolving plans for domestic spending has seeped
out, it has cheered conservative Republicans. They spent much of Bush's
first term criticizing him for letting spending grow too rapidly and
pressuring congressional leaders to try clamping down on spending.

     Excluding homeland security and emergencies like hurricanes, domestic
spending has grown by 27 percent since Bush took office in 2001.

     "I really do believe that this White House gets it," said Rep. Mike
Pence, R-Indiana, a leading House conservative.

     Last February, Bush proposed a 0.5 percent increase for domestic
programs, which Congress eventually doubled. Advocates of cutting spending
are hoping for better results next year, since November's elections will
bring more conservatives to the House and Senate for the new Congress.

     "They've run out of excuses," said Stephen Slivinski, budget director
of the conservative-leaning Cato Institute. "They can't blame anyone else."

     Still, Democrats and many moderate Republicans are certain to fight for
their priorities when Congress begins translating Bush' budget proposal to
actual spending legislation next year.

     "This tells you the administration's priority is tax cuts over fiscal
responsibility and providing central services to the American people," said
Thomas Kahn, Democratic staff director of the House Budget Committee.

     Last May, the White House budget office distributed a memo to federal
agencies warning them to anticipate an overall domestic spending cut of
about 0.7 percent next year. At the time, White House officials called the
document an early step in the budget process.

     "The budget process is still under way," White House budget office
spokesman Chad Kolton said Thursday. He said the administration still
intends to cut the deficit in half in five years, and the next budget "will
reflect our commitment to stay on that path."

  

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