Stage set for ‘great budgetary theater’

With lawmakers returning today from their summer recess, the Democratic-controlled Congress and the White House are headed for what could be the biggest budget fight in more than a decade -- and both sides are relishing it.

“There is going to be a big showdown,” said Robert L. Bixby, executive director of the Concord Coalition, a budget watchdog group, “because both sides believe they have something to gain politically. I don’t get the sense that either side is interested in compromise.”

President Bush, under pressure from fiscal conservatives in the Republican Party to take a firm hand in erasing the red ink in the budget, is threatening to veto nine of the 12 appropriations bills approved by the House. The White House said a number of the bills called for “irresponsible and excessive” spending.

Democrats, writing their first budget bills since taking control of Congress in January, vigorously defend the legislation, eager to increase spending on domestic programs they believe were neglected under Republican rule.

Sen. Robert C. Byrd (D-W. Va.), chairman of the Senate Appropriations Committee, mocked the president who inherited a budget surplus from his Democratic predecessor and has presided over six straight years of deficits. “It is truly remarkable that President Bush presumes to lecture Democrats in Congress -- or anyone for that matter -- on the subject of fiscal restraint,” he said.

Setting the stage for what one budget analyst predicted would be “great budgetary theater” is the clock. The 2008 fiscal year begins Oct. 1, and Congress has yet to send to the president a single appropriations bill needed to keep government agencies running. The House has passed all 12 appropriations bills, but the Senate has passed just one.

Cabinet heads wrote to congressional leaders last week urging them to pass appropriations bills “with reasonable and responsible spending levels” before the current fiscal year ends.

Bush has proposed expenditures of $933 billion, a 6.8% increase from this year’s spending levels. That amount does not include direct expenses for the wars in Iraq and Afghanistan. The House bills, by the White House’s estimate, exceed the president’s level by $22 billion.

No one expects this budget duel to force a partial government shutdown like the ones that occurred in the bitter 1995-96 budget impasse between President Clinton and congressional Republicans, led by then-House Speaker Newt Gingrich. Those shutdowns, which furloughed federal workers and created hassles such as passport backlogs, were seen as a national embarrassment and sparked a public backlash against the GOP.

Congress will probably pass stopgap funding measures to keep the government running.

But heightening the tensions between the White House and Congress, Democrats are targeting Bush initiatives for cuts, rejecting his request for more money to double the capacity of the nation’s emergency oil reserves and for the Millennium Challenge Account, a program aimed at spurring economic and political reforms in foreign countries in exchange for aid.

The budget battle is just one of the clashes expected to erupt between Congress and the White House in the coming weeks.

At the top of the list is a showdown over the war in Iraq. But fights also are brewing over issues such as a Democratic effort to expand a children’s health insurance program and a $20-billion bill to authorize hundreds of water projects, which Bush has threatened to veto though it has strong support even among his fellow Republicans.

GOP activists see a budget fight as a way to get back into the good graces of conservatives angry at the growth of government spending under a Republican president and previous Congress. Bush started with a $128-billion budget surplus, ran a $158-billion deficit in his first budget and set a record in the 2004 federal fiscal year with a $413-billion deficit. Congressional auditors estimate this year’s deficit at $158 billion.

“Bush could reinvigorate the Republican Party through a veto strategy this year and into next,” said Grover Norquist, president of the conservative Americans for Tax Reform. “The best gift the president could give Republican candidates is a Republican president vetoing Democratic overspending, which reminds people why you have to have an ‘R’ in the White House.”

Brian Riedl, a budget expert at another conservative group, the Heritage Foundation, predicts a “long, contentious appropriations brawl.”

“The president seems committed to standing his ground,” he added, saying it could help Bush rebuild his “fiscal conservative credentials.”

Bush and Congress are far apart on a wide range of spending proposals, in particular ones for social and environmental programs that Democrats want to see bolstered. The House bills would restore or add money for programs that Bush has targeted for cuts or elimination.

“How can the president say that $200 billion for the wars next year is a reasonable amount but another $22 billion for things like improving healthcare access for the uninsured, helping families send their kids to college, and preventing cuts to state and local law enforcement is just too much?” said Kirstin Brost, spokeswoman for the Democrats on the House Appropriations Committee.

Sean Kevelighan of the White House budget office said, “It’s time for Congress to end its desire to tax and spend and do what’s fiscally responsible -- pass individual spending bills that meet the president’s reasonable and responsible top-line spending proposal.”

One fight between Congress and the White House is being closely watched by California and other border states. Bush has proposed eliminating the $405 million provided this year to reimburse local and state governments for jailing illegal immigrants convicted of crimes, contending that the money would be better spent securing the borders and enforcing immigration laws. The House provided $460 million in its bill and the Senate has recommended $370 million. California receives about 40% of the money.

One spending increase singled out for criticism by the White House was a boost in funds for clean-water projects, such as those aimed at preventing beach pollution. Bush proposed $687 million. The House bill provided $1.1 billion and the Senate Appropriations Committee recommended $887 million.

A House proposal to provide $2.7 billion for energy assistance to low-income families also draws White House criticism. Bush proposed cutting it to about $1.8 billion. The Senate Appropriations Committee has recommended $2.2 billion, the current year’s amount.

The House and Senate appropriations committees have rejected White House-sought cuts in aid for state and local law enforcement, including a grants program started by the Clinton administration to hire local police officers, buy bulletproof vests and other equipment, and fund the installation of cameras and computers in patrol cars. Bush proposed cutting the program nearly 95%, from $541 million to $32 million; the House approved $725 million, and the Senate Appropriations Committee has recommended $550 million.

The White House has also run into conflict with some influential Democratic appropriations chairmen. Among the spending it has attacked is an extension of a loan guarantee program for U.S. steelmakers, which it calls “an unwarranted subsidy.” But the administration’s efforts to kill the $49-million balance were thwarted by two Democrats from steel-producing West Virginia -- Byrd and Rep. Alan B. Mollohan, chairman of the appropriations subcommittee that wrote the bill to fund the Commerce Department, which runs the steel program.

Democrats are optimistic that they will win the first scrimmage. The first bill they expect to send to Bush would increase spending for anti-terrorism initiatives. They are daring the president to veto it, saying that would give Democrats a chance to portray their party as stronger on national security.

The liberal Center on Budget and Policy Priorities contends in a report on its website ( www.cbpp.org) that the fight is over “whether domestic programs should be cut, as the president demands, or increased modestly, as the congressional majority favors” and asserts that the administration is “misrepresenting a disagreement over budget priorities as a disagreement over fiscal responsibility.”

Robert Greenstein, the group’s executive director, said the White House and congressional Republican leaders had their sights on the 2008 elections and on “making the Democratic Congress look bad.”

“I think that some of these bills, had they been presented to [Bush] in identical form from a Republican rather than a Democratic Congress, he’d sign them,” Greenstein said.

richard.simon@latimes.com