Monday, December 8, 2003

The House is poised to pass an omnibus spending bill today to fund much of government for 2004 — and set a record for both federal spending and federal deficits.

The bill, which rolls seven of the 13 annual spending bills into one package, totals $328 billion in discretionary spending and nearly $500 billion in mandatory and related spending.

Coupled with the six appropriations bills that already have passed, and the $87.5 billion already approved to fight the global war on terror, total discretionary spending will near a record $875 billion for fiscal year 2004, which began Oct. 1.

“In the historical context, you can think of times when politicians have gone for big-government solutions, and you can think of times when politicians have gone for tax cuts and limited government,” said Robert Bixby, executive director of the budget-watchdog Concord Coalition.

“What’s been unique about this Congress is they’ve tried to do both at once,” he said.

Fiscal year 2003 ended Sept. 30 with a $374 billion deficit, and discretionary spending topped $800 billion for the first time. Mandatory spending — formula-driven entitlements like Medicare and Social Security — has hit 11 percent of gross domestic product for the first time, the Heritage Foundation reports.

Federal spending also topped $20,000 per household for the first time since the last three years of World War II.

Growth in spending, more than any other issue, has infuriated lawmakers who have campaigned on a message of limited government and tax cuts. In a letter Friday to House Speaker J. Dennis Hastert, Illinois Republican, 14 conservative Republicans said they were fed up.

“The previous four years have seen the largest expansion of the federal government in 50 years,” the members of Congress wrote.

They called on House leaders to promise to bring up spending control legislation or, barring that, for President Bush to veto the spending bill. A veto is unlikely, though, given that the Bush administration helped craft the final bill and is pushing for quick action.

Budget hawks are particularly concerned about the growth rate of nondefense spending . Including the omnibus spending bill, one House aide said preliminary calculations show nondefense discretionary spending will have increased by about 5 percent in fiscal 2004.

Still, the deficit for 2003 was 3.5 percent of gross domestic product — not near the 1980s peak of 6 percent, and nowhere near the double-digit percentages of the World War II years.

Republican leaders also say spending is more restrained than it would have been if Democrats were in control.

“The Republican Party could be fairly criticized for not having the discipline in spending we should have,” said Sen. Lindsey Graham, South Carolina Republican, who voted against the Medicare bill last month because of its huge costs. “But we’re the best game in town. Compared to the Democrats, we’re great.”

Liberal advocacy groups emphasize the deficit over the spending numbers, and they blame the Bush administration’s tax cuts for increasing the government’s shortfall.

“Revenue losses are roughly twice as significant as spending increases in turning the budget from surplus to deficit over the last three years,” Richard Kogan at the Center on Budget and Policy Priorities wrote in a report.

About the only area where government spending has been reduced is interest payments on the national debt. Those have declined because the government ran surpluses from 1998 through 2001, and because interest rates are lower.

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