- The Washington Times - Thursday, February 7, 2002

Perhaps the gutsiest part of President Bush's wartime budget for 2003 is his politically daring attempt to curb the growth in nondefense spending in an election year.

The news media have understandably focused on the huge $48 billion increase in defense spending to combat terrorism at home and abroad, and the nearly $38 billion increase for homeland defense. Polls show Americans are more concerned with these two issues than anything else right now and Mr. Bush's budget deals with both of them big time.

But the president seeks to offset these immense budget increases by holding down the rest of the discretionary budget. If you exclude foreign and domestic defense spending increases, aggregate spending for everything else would rise by a bare 2 percent. And this is where the budget battle will be fought over the coming months.

Some might say this is foolish in the midst of an election in which control of Congress is at stake and when the country is about evenly divided between the parties.

But the White House is confident it will succeed on several fronts because:

(1) We are at war and presidents usually get most of what they want in wartime.

(2) The Democrats' arguments against Mr. Bush's budget are weak, ill-timed and contradictory.

(3) And virtually every poll shows that Mr. Bush's priorities are the people's priorities, too.

As is commonly the case in political battles in Washington, the air is filled with a lot of half-truths, myths and downright lies. Let's take a look at some of the worst:

• Myth No. 1: The Bush budget is plunging the country into huge and dangerous deficits.

After four straight years of surpluses, we will run up deficits of $100 billion this year and $80 billion next year under Mr. Bush's plan. But these deficits are relatively tiny in a $2 trillion budget, and small by historical comparisons at a time of war, representing less than 1 percent of a $10 trillion-a-year economy.

The deficits are largely the result of a sharp decline in tax revenues because of the recession, but they will most likely shrink and disappear in a couple of years as our economy recovers and tax receipts mushroom.

There are only three reasons to justify deficits: war, recession and a national crisis at home. All three have hit us.

• Myth No. 2: The deficits will increase interest rates and weaken our economy.

There is no evidence showing any relationship between deficits and interest rates. When the deficits shot up in the 1980s, interest rates fell and the economy grew by 4 percent to 5 percent a year. Interest rates are falling now. We are borrowing the money at very low short-term 1.8 percent interest rates that should have no negative impact on our economy.

• Myth No. 3: Mr. Bush's budget is forcing the Treasury to dip into the Social Security fund to pay its bills and thus threatens future retirees and their benefits.

We have a unified budget, and as we have done in previous decades, we use the payroll tax revenue to either reduce our debt or to help pay for government operating expenses. The loans from Social Security are backed by the full faith and credit of the federal government and are as good as gold.

• Myth No. 4: Mr. Bush's budget policies and the tax cuts have erased the surpluses.

Not true. Last summer the Congressional Budget Office was projecting surpluses of about $4.5 trillion over 10 years. CBO now forecasts that the surpluses will be about $1 trillion, still a huge sum by historical standards and one that will grow substantially as the economy expands.

• Myth No. 5: Mr. Bush is slashing important programs that will hurt the needy and harm the environment.

Actually, he protects his political flanks by substantially expanding some of the government's most politically popular programs.

The budget calls for doubling medical research at the National Institute of Health to $27.2 billion. Veterans programs would get a 7 percent increase. There is $190 billion for Medicare prescription drug benefits for the needy. The Health and Human Services budget would balloon by 9 percent. EPA's spending would rise by 2 percent.

However, Mr. Bush would offset these and other increases by cutting or freezing spending in dozens of lower-priority, waste-ridden programs in the Departments of Agriculture, Commerce, Labor, Interior and elsewhere.

There will be many budget-cutting decisions that will be questioned and criticized, but the White House had to make difficult spending choices between funding the war on terrorism and protecting homeland defenses on the one hand and funding lower-priority programs on the other.

The president will surely get the money he wants to win the war on terrorism and to protect Americans from another attack. But in a high-stakes election year, all bets are off on everything else.

Republicans and Democrats will be pushing hard this year to increase spending and to fill appropriations bills with as much pork as they can get to feather their political nests back home. Preventing lawmakers from going too far will be Mr. Bush's other war.

Donald Lambro, chief political correspondent for The Washington Times, is a nationally syndicated columnist.

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