- The Washington Times - Tuesday, February 6, 2007

1:04 p.m.

The Bush administration urged skeptical members of Congress today to support the president’s new $2.9 trillion spending plan, arguing that the budget can be balanced without raising taxes.

“We are submitting a budget that includes a surplus in 2012, which is achievable if we keep our economy growing,” Treasury Secretary Henry M. Paulson Jr. told the House Ways and Means Committee.

Mr. Paulson disputed contentions by Democrats that the budget achieves its projected $61 billion surplus in 2012 by adopting overly optimistic economic assumptions.

“While no one has a crystal ball, our economic assumptions are close to the consensus of professional forecasters,” he said.

Mr. Paulson has been given the task by President Bush to see if a consensus can be reached on overhauling the government’s huge benefit programs such as Social Security and Medicare. He said he looked forward to sitting down with Democrats and Republicans to see if a bipartisan consensus can be obtained.

Mr. Paulson said the reductions in the new budget in spending on Medicare and Medicaid would lay the foundation for more comprehensive reform of the benefit programs.

However, committee Chairman Charles B. Rangel, New York Democrat, said he saw the budget as a missed opportunity on the part of Mr. Bush to reach out to Democrats, who for the first time in his presidency control both the House and Senate.

“The president has to be a party to this. He can create a climate that would allow us to move forward in a bipartisan way,” Mr. Rangel said.

White House budget director Rob Portman told the House Budget Committee that while the administration’s budget projects balance in the short term, shortfalls in Social Security and Medicare promise to swamp taxpayers in the long term.

“The progress we are making in getting our fiscal house in order short term must not distract us from this long-term challenge,” Mr. Portman said. He added that it was possible that the government’s improving revenue picture could reduce the deficit from the $244 billion projected by the White House for the current year.

The $2.9 trillion Bush budget for the budget year that begins Oct. 1 would provide a massive boost for the Defense Department, seek an additional $245 billion in spending on the wars in Iraq and Afghanistan for this year and 2008 and restrain spending across a wide swath of the rest of government.

The spending restraints allowed Mr. Bush to project gradually declining deficits, with the budget going into surplus in 2012, three years after he has left office. His spending plan would make his first-term tax cuts permanent at a cost over the next decade that the administration estimates at $1.6 trillion.

Democrats, however, charged that the president is able to produce a surplus only on paper by using overly optimistic assumptions about how much revenue the economy will generate over the next five years and by leaving out expensive items such as further war costs after 2009 or providing money beyond this year to fix the alternative minimum tax so that it doesn’t hit millions of middle-income taxpayers.

“This budget is just disconnected from reality,” said Senate Budget Committee Chairman Kent Conrad, North Dakota Democrat.

House Budget Committee Chairman John M. Spratt Jr., South Carolina Democrat, said the Bush plan shortchanges domestic programs such as heating subsidies for the poor, education and the State Children’s Health Insurance Program, which helps children of low-income working families that earn too much to qualify for Medicaid but not enough to afford private insurance.

“We hope we can find common ground, but we also find the differences between us are substantial,” Mr. Spratt told Mr. Portman.

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