- The Washington Times - Monday, April 16, 2001

President Bush is taking a deceptively low-key approach to reducing the growth of government. He is gently applying the brakes to the rate of increase in discretionary spending, so he can refund the savings to the people through lower tax rates.
This is the time of year when there is usually a big blowup over the presidents budget. But not this time at least not yet. For one thing, Congress is in recess. For another, Mr. Bush has artfully crafted a budget that does not seem to cut very much, but that, over time, will actually cut quite a bit.
Democratic leaders, who have never seen a budget that called for too much spending, went through their usual act of outrage when the details of the Bush budget came out last week. But the real message about the presidents budget for the coming 2002 fiscal year was summed up in a headline in The Washington Post that read: "First Bush budget makes modest cuts."
Mitch Daniels, the White House budget director who drew up the spending plan, says, "I dont consider this a bold-strokes budget. We tried to move pretty carefully, and sometimes marginally."
Instead of waging a long guerrilla war with Congress over programs that account for a minuscule portion of federal spending, wasting his time and his political capital, Mr. Bush is using a different strategy. He intends to make modest cuts in a variety of marginal programs, hold others to what was spent last year, and increase funding for the programs that he and the American people believe deserve a higher priority.
Thus, he wants discretionary spending (programs that receive annual appropriations from Congress each year) to rise no more than 4 percent next year, or just above the rate of inflation.
Sounds reasonable enough. But its a big change from the spending joy ride Congress has been on the last few years. Expenditures rose 20 percent over the past three years. They were up by more than 8.6 percent last year alone. At that rate, spending would rise by more than $1.4 trillion over the next 10 years, which is about what the Bush tax cut would cost over that period.
To make this strategy work politically, and thus blunt the Democrats claim he is not a compassionate conservative, Mr. Bush is calling for major spending increases in key social welfare sectors.
The National Institutes of Health budget gets a $2.75 billion increase, pushing its total budget to $23 billion. That will lead to a revolution in NIH research grants for everything from AIDS to cancer. There will be a major $124 million increase in community health clinics for the uninsured, and funding for the states to provide prescription drugs for the needy.
Education would get $44.5 billion, a 12 percent increase that would put more money into poor school districts, triple assistance to reading programs and give states $320 million for testing to improve accountability and teaching.
There is much more money for meat inspections, faster immigration processing, health care for veterans and IRS modernization.
The administration would give the Defense Department $14 billion more, pushing its budget to $310 billion. The Pentagon is slated for a departmentwide strategic review that promises to modernize the entire military structure in order to bring it fully into the 21st century.
But to keep spending from rising more than 4 percent a year, Mr. Bush also calls for a number of spending cuts. These include a 14 percent cut in the Army Corps of Engineers, from $4.5 billion to $3.9 billion, to halt wasteful boondoggles that have little or no merit; a 24.5 percent cutback in Export-Import Bank loans that benefit Fortune 500 companies; a deep $411 million cut in Housing and Urban Developments community-development block grants, which too often go to upper- and middle-class community projects.
A number of other departments and agencies would see their budgets cut or at least held at last years level. The Environmental Protection Agency would be cut by $500 million. The Energy Department would take a big hit, losing $190 million from its alternative-energy research program, and $40 million from its auto-industry research activities, among other cutbacks. The Interior Department would take a 3 percent overall cut.
The Agriculture Department perhaps the most wasteful, outdated federal bureaucracy would be cut deeply. The Commerce Departments $200 million-a-year advanced-technology program, which provides handouts to the technology industry, would be suspended.
Mr. Daniels told me that this years budget is only a foretaste of the deeper cuts and program changes to come. There are many programs, he thinks, that can be privatized, and others whose funds would be better spent directly by the states.
Mr. Daniels wants to see more outsourcing on the part of departments, because he thinks many government services can be performed more efficiently by private-sector contractors.
But these more ambitious budget cuts must wait for another year. Wisely, the White House does not want an early budget fight to interfere with its focus on creating the biggest and most important budget cut of all: the tax cuts that will send $1.3 trillion to $1.6 trillion back to the taxpayers who earned it, thus reducing the size of the budget as a share of the overall economy.
Thats why Republican leaders plan to act on tax cuts by the end of May, long before the political squabbling over appropriations bills starts later this summer. By that time, the tax cuts will be signed, sealed and delivered, and Mr. Bush can use his veto pen to keep spending under control.

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