- The Washington Times - Monday, January 6, 2003

WASHINGTON, Jan. 6 (UPI) — As President George W. Bush Tuesday unveils his economic stimulus package, the administration wants Congress to rein in domestic spending as it gears up for what some critics say will be a costly war with Iraq.

The president in the past two months has refocused his attention from the war on terrorism back towards the ailing U.S. economy, which has shown few signs of recovery. The Bush White House has an ambitious domestic agenda whose funding may be complicated by the pending conflict with Iraq, which has an uncertain price tag.

The White House was unwilling to discuss how much it believes a potential war with Iraq could cost, though former Bush economic adviser Lawrence Lindsey said the price tag could top $200 billion. White House Budget Office Director Mitch Daniels put the cost somewhere between $50 billion and $60 billion.

The Congressional Budget Office's estimated the cost of deploying troops to the Gulf would be between $9 billion and $13 billion, and that prosecuting the war would cost between $6 billion and $9 billion a month. The cost of an occupation following combat operations would vary from about $1 billion to $4 billion a month, the CBO said.

"Well, clearly, anything dealing with Iraq is such a hypothetical, I'm not in a position to address what a potential cost could or could not be. But regardless of any decisions that are made on Iraq, the economy needs a boost," said White House Press secretary Ari Fleischer on Monday.

Historically, Bush could face a parallel with the administration of President Lyndon Johnson, who in the 1960s fought both the war in Vietnam and a war on poverty at home. Brookings Institution Senior Fellow William Gale said Johnson likely overstressed the federal budget by doing so.

The White House said Monday that the president plans to ask the U.S. Congress to hold the line on spending. Congress will take up the appropriations bill in the next two weeks that was left unfinished when the 107th Congress adjourned.

"They've already agreed on an aggregate cap of $750 billion for all domestic discretionary spending for the 11 remaining appropriation bills," Fleischer said. "So the president is encouraged by the fact that they have already agreed to a cap that the administration supports for the upcoming appropriation cycle for 2003."

The Congressional Budget Office estimated a $157 billion federal budget deficit in 2002, the result of a slump in tax revenues coupled with double-digit spending growth. The CBO predicted a $147 billion deficit in 2003.

"Our administration is concerned about deficits, and the way they deal with deficits is you want to control spending. And I hope Congress lives up to their words," said Bush on Monday after a meeting with members of his Cabinet. "When they talk about deficits, they can join us in making sure we don't overspend."

"The president's approach is that what creates surpluses in our country and in our government's coffers is growth, that without growth, there are deficits," Fleischer said. "In times of growth, we have surpluses. And that's what history has shown. And so the current deficit is caused as a result of the recession."

The Bush White House said it remained committed to approval of its core domestic items that were the hallmark of the president's 2000 campaign. Most of the measures were stalled in the Democratically controlled U.S. Senate in the last session.

Those items are a prescription drugs program, Medicare reform, Social Security reform, education reform and a ban on cloning.

Bush's request to Congress comes as he is set to announce his economic stimulus package during a speech at the Chicago Economics Club on Tuesday, the same day the Republican-controlled 108th Congress convenes.

The plan will likely include aid for cash-poor states, tax incentives for businesses, expanded unemployment benefits and acceleration of the president's tax cuts approved last year. Reports estimate the cost of the plan at between $300 billion and $600 billion over the next decade.

Democrats offered up an alternative plan which seeks 26 additional weeks of unemployment benefits for the jobless, refundable income tax rebates of up to $300 per person or $600 per working couple and increased aid for cash-strapped states.

The Center for Budget and Policy Priorities said the nation already faces tremendous long-term fiscal challenges. The retirement of baby boomers, rising health care costs and tax cuts enacted in 2001 if made permanent will exert tremendous pressure on budget, the group said.

On prescription drugs for seniors, the White House on Monday told United Press International that Bush remains committed to passage of a strong bill that would provide relief for seniors. Deputy Press Secretary Scott McClellan said Bush wants seniors to have more choice while limiting out-of-pocket costs.

Republicans backed a bill in the last session with an estimated $340 billion price tag that would have provided a government-administered program with drug subsidies for low-income beneficiaries. The House had passed a drug bill that would have cost $320 billion over 10 years and would have been administered by private drug companies.

On Social Security, the White House said Bush "remained committed" to reforming the decades-old entitlement system. Bush has supported giving younger workers the option of placing a portion of their Social Security into stocks or mutual fund accounts. The Bush White House declined to go into detail about the administration's efforts to begin revamping the system.

Political analysts believe Bush has opted to delay reforming Social Security until 2004 because it had essentially become a political albatross. Privatizing Social Security would have little support among an American public skittish about the stock market in the wake of declining stock values and a slew of corporate scandals in 2002, experts said.

On education Bush said Saturday that he would seek an additional $1 billion for the Title I program in the 2004 budget, bringing the funding for the program up to $12.3 billion. He also said he would seek more than $1.1 billion for federal reading programs, up $75 million from the 2002 budget.

McClellan said education reform has seen historic funding increases under Bush, more than 43 percent since 2000 while implementing bold reforms. The state governments, however, are upset over what they consider a lack of funding for student testing, teacher quality and performance enhancements.

The White House also said Bush wants the new Congress to act quickly to ban cloning as the U.S. Food and Drug Administration investigates claims by a company that it has produced the first cloned human infant.


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