- The Washington Times - Thursday, January 30, 2003

Congress began the 2004 budget process in earnest yesterday, armed with a Congressional Budget Office report that forecasts deficits of $199 billion this year and $145 billion next year, with steadily building surpluses not expected until 2007.
Democrats pointed to the CBO report as proof that the Bush administration and Republicans have squandered the surpluses of the late 1990s. Republicans blamed the deficits on lingering economic stagnation following the September 11 attacks and huge increases in defense spending to fight the war on terrorism.
Sen. Don Nickles, Oklahoma Republican and chairman of the Senate Budget Committee, pointed out that CBO projections are often more wrong than right. The CBO predicted a $313 billion surplus in 2002, but the final figure was a deficit of $159 billion.
"CBO has never missed their estimates by $472 billion before," Mr. Nickles said following the first meeting of the full Senate Budget Committee yesterday. "That's a new realm of misjudgment."
White House budget chief Mitchell E. Daniels Jr. said earlier this week that President Bush's 2004 budget, due Monday on Capitol Hill, will include a deficit of $300 billion. His figures are reflective of increases in homeland security and Pentagon spending, as well as the proposals outlined in the president's State of the Union speech Tuesday night that the CBO did not take into account.
Although Mr. Bush has urged Congress to increase discretional spending by no more than 4 percent next year, he proposed spending $400 billion over the next decade to strengthen Medicare, $15 billion over five years to fight the spread of AIDS in Africa, $6 billion for vaccines to protect against biological attack, $1.2 billion for research in hydrogen-powered automobiles and $450 million for child-mentoring programs.
Sen. Kent Conrad, North Dakota Democrat and ranking member of the Senate Budget Committee, said the deficit projections prove that Mr. Bush's $647 billion tax-cut proposal, added to spending programs outlined in Tuesday's State of the Union address, will ensure "large deficits in for the foreseeable future."
"Confronting this ugly truth, the Bush administration has begun claiming that deficits don't matter," Mr. Conrad said. "What an absurd claim. The relentless tax-cutting agenda of this administration is creating a massive structural deficit that will drive up interest rates, crowd out private-sector growth and slow long-term economic growth."
The battle over Mr. Bush's tax-cut promises to be fierce in the closely divided Senate. Many influential Republicans such as Mr. Nickles and Senate Finance Committee Chairman Charles E. Grassley of Iowa embrace the president's plan. Less conservative Republicans, however, such as Sen. Olympia J. Snowe of Maine, say they are worried about increasing the deficit, and question the "stimulative value" of parts of Mr. Bush's plan.
Meanwhile, House Majority Leader Tom DeLay, Texas Republican, said he considers Mr. Bush's proposal "the floor, not the ceiling" when it comes to tax cuts.
Rep. Jim Nussle, Iowa Republican and chairman of the House Budget Committee, said the status of a federal deficit "is not the only measure of fiscal responsibility." Enacting pro-growth policies like the president's tax plan, Mr. Nussle said, takes precedence.
"I can balance the budget this afternoon," Mr. Nussle said. "But seniors won't have a drug benefit, hospitals in rural areas will close. We will not fund the obligations that the president has committed us to overseas. We will not resolve AIDS in Africa. We will not continue reforms in education. We will not grow the economy."

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