- The Washington Times - Saturday, July 13, 2002

The Bush administration is predicting a $165 billion federal deficit this fiscal year, deeper than first expected and sure to inflame an already-difficult appropriations process that stalled yesterday over an 11th-hour administration demand to cut the emergency-spending bill.

This new estimate is nearly $60 billion more than the administration predicted in February. But Office of Management and Budget Director Mitch Daniels predicted the government will return to surpluses in fiscal 2005.

White House spokesman Ari Fleischer blamed poor fiscal 2002 numbers on last year's recession, spending from the war on terrorism and the slumping stock market, which he traced back to before Mr. Bush's administration.

"Capital-gains revenues are down as a result of the stock market change," he said. "The change in the stock market, particularly in the technology-heavy Nasdaq, began in March of 2000."

But Democrats blamed the president's 10-year, $1.35 trillion tax-cut plan passed last year and say deficits will last much longer than the administration predicts. House Democrats' calculations show a $167 billion deficit this year and continued deficits through 2009. In each of those years, the revenue earmarked for the Social Security and Medicare trust funds would also be spent.

"This is a clear editorial on the fiscal policies of this administration," said Senate Majority Leader Tom Daschle, South Dakota Democrat. "I have said before that it was a disaster. I think the numbers today demonstrate why I believe that."

Mr. Daschle said rather than looking to cut more money from the pending emergency-spending bill, "How about going back to the tax cut? I mean that's where the savings could have been generated."

That bill is now stalled after senior lawmakers from both parties yesterday accused the administration of torpedoing a House-Senate deal on a $30 billion emergency-spending measure, which was to be announced yesterday. They say an agreement fell apart when the White House demanded that the chambers' negotiators cut the bill to bring it closer to the $27 billion request the president submitted in February.

Mr. Daniels and OMB submitted a list of potential cuts: $1.1 billion from an airline loan-guarantee program put in place after September 11, $400 million from defense procurement or research and development, $80 million in embassy security and $50 million in foreign military assistance.

Sen. Ted Stevens, Alaska Republican and ranking member of the Senate Appropriations Committee, joined Rep. C.W. Bill Young, Florida Republican and chairman of the House Appropriations Committee, in criticizing Mr. Daniels for the late-hour request.

"I was quite disturbed by the list," Mr. Young said. "All they care about is numbers. We have to be concerned about what those numbers do for our country."

Republicans' criticism paled, though, in comparison to Sen. Robert C. Byrd, West Virginia Democrat, who called Mr. Daniels "our little Caesar" and said he "is always meddling in the Congress."

"I am fed up to my ears," Mr. Byrd said. "The appropriations process is being mangled, it is being maimed, it is being murdered at the hands of someone who is not elected by the people of this country."

Mr. Daniels countered that he has actually been pulling his punches.

"One day soon, I think I'll bleed to death through my tongue, I've been biting it so much," he said.

And he got a vote of confidence from Mr. Fleischer.

"The president knows that there will always be people in Congress who want to spend more of the taxpayer dollars on bigger government and on more pork spending," he said. "The president knows that the taxpayers are grateful to have a distinguished leader like Mitch Daniels at the helm, whose job is to protect the taxpayers' money."

This article is based in part on wire service reports.

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