- The Washington Times - Friday, July 13, 2001

Office of Management and Budget Director Mitch Daniels testified yesterday that the nation remains fiscally strong and the government will amass an immense surplus despite a wavering economy.
"I am glad to report that in stark contrast to past economic turndowns, the nation's finances are in remarkably strong shape," Mr. Daniels told the Senate Budget Committee.
Senate Budget Committee Chairman Kent Conrad, North Dakota Democrat, disagreed, saying the faltering economy, coupled with the $1.35 trillion, 10-year tax cut enacted earlier this year, put the federal budget dangerously close to deficit.
He contends that the budget will have to rely on a portion of the Medicare trust fund to retain a surplus in fiscal 2001 and on the Medicare and Social Security trust funds to remain in balance in fiscal 2002.
"To suggest that [the tax cut] does not have a role here is not factually accurate," Mr. Conrad said.
The disagreement comes as Congress faces a less-rosy fiscal picture than it did this winter. The downturn marks the first time in years that surpluses have not exceeded projections.
Mr. Daniels predicted that federal revenues would grow by 3 percent in fiscal 2001, rather than the 5 percent previously predicted. While spending also could be slightly lower than predicted, federal budget surpluses for fiscal 2001 could come to $160 billion instead of the $275 billion predicted in January, he said.
Mr. Daniels said the surplus would have been larger if the budget for fiscal 2001 had not "contained the largest one-year spending increase in history." Still, Mr. Daniels said, "the major reason for a surplus that is merely immense, rather than gigantic, is of course a shaky economy."
Sen. Pete V. Domenici, New Mexico Republican, said Mr. Conrad's reasons for calling Mr. Daniels before the committee were political. An aide to Mr. Domenici said Mr. Conrad is trying to "set the stage for 2002 [congressional elections]. He is preparing for 'Medi-scare.'"
Mr. Conrad said he only wants the administration and Republicans to fix the problem they have created.
Republicans countered that Mr. Conrad, as chairman of the Budget Committee, has the power to try to revise the budget resolution for fiscal 2002 and to prevent spending beyond the fiscal 2002 budget resolution approved this spring.
House Budget Committee Chairman Jim Nussle, Iowa Republican, said it is this excess spending that should be addressed first. He criticized a decision by the Senate Appropriations Committee to classify $235 million as emergency spending for wildlife suppression programs.
Because emergency spending is not counted against the annual caps on spending, "the Senate is essentially 'palming' the money to use later," he said in a statement.
In other spending developments, the Senate Appropriations Committee voted to add $168,000 to the fiscal 2002 legislative branch appropriations bill to buy another 24 Harley-Davidson motorcycles for the U.S. Capitol Police.
The police department currently uses smaller Asian-made motorcycles. With the extra money, pushed by Sens. Ben Nighthorse Campbell, Colorado Republican, and Richard J. Durbin, Illinois Democrat, all the Capitol police bikes used on the street will be American-made.
"In Japan, the police ride Japanese-made motorcycles. I think we have the same right," Mr. Campbell said.

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