- The Washington Times - Monday, February 5, 2001

PALO ALTO, Calif. President Bush will need to make budget cuts and slow the growth in government spending to offset the costs of his tax cuts and the rest of his agenda, according to a key adviser to the administration on the budget.
John F. Cogan, a budget analyst at the Hoover Institution here who has been working on Mr. Bush's budget plan, said that there was more than enough room in the burgeoning tax surpluses to pay for the president's sweeping tax cuts and new spending initiatives, but that some budget cuts will be needed to hold down the overall growth in government spending.
"You have to have fiscal restraint in order to achieve the tax plan. You have to reduce the growth in government spending," Mr. Cogan said in interview last week with The Washington Times.
"You have to cut elsewhere. You have to take money from lower-priority programs, pork-barrel spending and programs that have outlived their usefulness to finance the president's initiatives," Mr. Cogan said.
"One cannot put all of the president's initiatives on top of existing federal spending," he said.
Mr. Cogan, who also helped to design Mr. Bush's tax-cut plan, said government spending is growing 5 percent a year, nearly twice the inflation rate, and "we have to get under that."
Mr. Cogan, who was offered a top post in the administration but turned it down, has been working on the budget blueprint for fiscal 2002 that Mr. Bush will send to Congress later this month.
That document will detail the size and cost of Mr. Bush's proposals, including his tax cuts, which will total between $1.6 trillion and $1.8 trillion over the next 10 years, plus other spending plans for education, health care, an anti-missile defense system, prescription drug benefits and social welfare assistance to religious groups, among other things.
Details of how much Mr. Bush intends to spend on these and other areas of his agenda have been sketchy and until now there has been little if any talk among his top aides about budget cuts. Mr. Bush's budget director, Mitch Daniels, is still working on the details of the budget for the next fiscal year, and administration officials said the plan is still "a work in progress."
Throughout his election campaign, Mr. Bush's message focused on his proposals to increase spending for education, beef up military readiness and make prescription drugs available to the needy. He did not talk much in his campaign about restraining spending or making budget cuts in certain areas. If there was a federal agency or program that Mr. Bush thought was wasteful or unnecessary, he never shared that feeling with the voters.
Thus, Mr. Cogan's remarks that spending cuts must be a part of Mr. Bush's overall fiscal policies add a new and politically risky dimension to the coming debate in Congress over the president's tax cut plan and new spending proposals.
As a result of the budget surpluses, the spending debate has shifted to how much of the surplus should be given back to taxpayers through tax cuts, how much should be used to reduce the public debt, and where some of it should be used to increase spending for unmet social needs.
New economic forecasts by the Congressional Budget Office estimate that the federal government will have $5.6 trillion more in tax revenues than it needs to pay its bills over the next decade, $1 trillion more than it had forecast last summer.
Mr. Cogan refused to discuss any of the details of the budget that is being put together by the White House. But sources within the Office of Management and Budget (OMB), which Mr. Daniels heads, said the administration has been looking at key areas where Congress has sharply increased spending over the past two years as the surpluses mushroomed much faster than anyone expected, giving congressional lawmakers much more money to play with.
One area that has alarmed Bush officials is the rapid rise in pork-barrel spending, where lawmakers have been able to insert earmarked provisions into spending bills for special interests in their states, funding that for the most part avoids committee review or oversight or even preapproval by the respective departments or agencies.
An OMB analysis, quietly conducted last month by the Bush administration, discovered that members of Congress put 6,183 earmarked provisions into 13 appropriations bills last year, adding between $15 billion and $20 billion to federal spending.
One question that the Bush administration must decide is whether to make corresponding cuts in the respective departmental budgets to offset this additional spending, an administration official said.
"The huge growth in pork-barrel spending is the strongest and most compelling argument one can use for the president's proposal to give a part of the surplus back to the taxpayers who earned the money in the first place," said a Bush adviser. "If we don't, Congress will spend it."

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