- The Washington Times - Monday, March 25, 2002

They don't have budget fights like they used to anymore.House Republicans and Senate Democrats offered their budget blueprints last week for the coming fiscal year, but there were few macro differences between them. Both budgets call for spending $2.1 trillion. Both include President Bush's increases for the military and homeland defense. Both would continue borrowing from the Social Security fund to cover some of the shortfall in general revenues. Both would run short-term deficits.
Yet several interesting developments are emerging from the budget process this year that have a lot of bearing on whether the budget, the deficits and the Bush tax cuts will be major issues in the midterm campaign. The short answer is, they won't.
After all his huffing and puffing, fuming and fussing about the deficits, raiding Social Security and Mr. Bush's "terrible tax cuts," Senate Budget Committee Chairman Kent Conrad produced a budget plan that doesn't really do much about any of those things.
The feisty North Dakota Democrat does not propose slashing spending to curtail the deficit. Indeed, he would spend more money for education and other social welfare programs. He does not specifically call for repealing or slowing down any of the Bush tax cuts that he has been fulminating against for the past year. As for the deficits, let's just dip into Social Security as we always have and deal with that another year, he says.
Nor does he suggest that the additional $48 billion that Mr. Bush wants to fight the war against terrorism, or the $38 billion for homeland defense, be reduced, despite those in his party who question whether we need to spend that much to combat the terrorists who want to murder us.
Conrad does propose that Congress should come up with a plan to cut spending or raise taxes by $433 billion so the feds can stop raiding the Social Security fund. But he suggests that issue should be considered by the next Congress. To which New Mexico Sen. Pete Domenici, the ranking Republican on Mr. Conrad's committee, responds, "Lord, give me virtue, but not quite yet. That's your budget."
Like his Republican colleagues, Mr. Conrad hopes the economic recovery is going to be a lot faster than anyone expects, and that will mean higher tax revenues this year and next.
The Congressional Budget Office projects that the recovery will add another $415 billion to their revenue projections, making Mr. Conrad's deficit concerns for fiscal 2003 a moot issue.
The House passed its budget blueprint Wednesday on a largely party-line vote a nonbinding budget outline that sets overall spending targets, which Congress then proceeds to ignore. Both sides use the document to set forth their own priorities for the campaign, and that's what occurred last week.
Thus far, though, Senate Democratic leaders do not appear to be getting the kind of political red meat they had hoped for out of the budget battle. Several things are not going their way.
One is that budget deficits do not seem to be much of an issue this year because of the war on terrorism. "We built the ships we needed in World War II before we had the money," notes Rep. Bill Thomas, the California Republican who chairs the House Ways and Means Committee.
Similarly, we'll borrow the money we need for this war from the bond market and from Social Security revenues and pay it back later at relatively low interest rates, by the way.
In retrospect, Senate Democratic Leader Tom Daschle's hyperbolic warnings in January of huge deficits, skyrocketing interest rates and economic catastrophe now seem silly, especially in light of more bullish tax revenue forecasts from a rebounding economy.
The government is spending $2.1 trillion per year and expects a deficit of about $100 billion next year, a relatively small part of the equation and one that will eventually be erased as revenues rise.
As for Social Security's near-term funding solvency, it is the only part of the budget that is still in surplus. Its future is hardly endangered by a little borrowing in time of war to tide the feds over in the next fiscal year.
As for the future long-term solvency and security of Social Security and Medicare that can only be fixed "by the growing, prospering American economy and by reform," Mr. Domenici correctly says.
As for the growth in spending itself, Mr. Bush said the other day that the price of liberty is high, "but never too high." To offset increases for defense and other priorities, the administration hopes to keep domestic discretionary spending flat in the aggregate.
But don't count on it. This is a critical election year with both houses of Congress up for grabs, and Republicans and Democrats are planning to stuff as much pork into this year's spending bills as they can get away with.
"No one ever lost an election by spending too much money for the folks back home," a lawmaker told me.
Message to President Bush: Get your veto pen ready.

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


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