Friday, January 23, 2004

President Bush’s proposal to limit discretionary spending to less than 1 percent next fiscal year will not require drastic cuts to federal programs, the White House said yesterday.

It is a “leveling off at a high altitude,” an administration official said.

But John Irons, an economist with OMB Watch, a nonprofit watchdog group that examines actions by the federal Office of Management and Budget, said the president’s proposal will amount to sharp cuts to federal programs because inflation will rise by about 2 percent this year.

“A 1 percent increase means a real cut in programs. Once you throw in all the increases in some programs, that will mean deep cuts on other programs,” he said.

The White House would not divulge yesterday which programs are on the chopping block. But the president, under pressure from conservatives to control runaway spending, decided that the estimated $500 billion deficit requires him to propose a budget that effectively freezes discretionary spending in fiscal year 2005, which begins Oct. 1.

Bush spokesman Scott McClellan said “there are certain areas that will not receive as much funding as some other areas.”

“The president, in every one of his budgets, has acted to fund our priorities and then rein in the growth in government spending,” the spokesman said. “This will help us meet our priorities, but also move forward on the president’s plan for cutting the deficit in half over the next five years.”

One prominent conservative, Paul M. Weyrich, national chairman of Coalitions for America, has criticized the president’s past spending habits.

“The Republican Congress is spending at twice the rate as under Bill Clinton, and President Bush has yet to issue a single veto,” he said. “I complained about profligate spending during the Clinton years but never thought I’d have to do so with a Republican in the White House and Republicans controlling the Congress.”

But the White House official said it was precisely that spending that will allow Mr. Bush to essentially freeze spending next fiscal year.

Federal expenditures on everything from the National Institutes of Health to social and research programs were so dramatically increased throughout the 1990s — and in the case of NIH, the first three years of the president’s term, when he doubled its budget — that a year of “belt-tightening” will have little adverse effect, the official said.

“We had this massive ramp-up of spending in the late 1990s when the surpluses first arrived,” the official said.

While about one-third of the federal budget is discretionary the president’s proposal will not affect entitlement programs, such as Medicare and Social Security. Mr. Bush is also proposing an increase of governmentwide homeland security funding of 9.7 percent and about a 4 percent increase in the military budget.

In addition, Mr. Bush will likely propose double-digit increases for priority programs, such as education, which means other programs will have to take large cuts to balance out the increases.

But that, the White House official said, can be done. This year’s spending bill, passed Thursday by Congress and signed by the president yesterday, is a prime example.

Adhering to Mr. Bush’s call to hold spending increases to 4 percent, Congress was still able to increase the Agriculture Department’s food safety, animal and plant inspectors by 4 percent from last year; raise the FBI budget by 9 percent; add $2.4 billion to combat AIDS in poor African and Caribbean countries, up 47 percent; and increase the veterans health care budget by 11 percent.

But Mr. Irons said setting a 1 percent target is not the same as holding a spending increase to 1 percent.

“One percent isn’t going to get you very far,” he said. “With huge increases in homeland security and defense and other areas means that there’s a lot of area that will not get funding. To arbitrarily pick one percent, you’re making choices on what to spend more money on and what to not spend more money on.”

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