Long Budget Battle Likely Over Spending Priorities

President Bush’s new budget plan, by calling on Congress to share the blame in choosing where to make politically sensitive program cuts, promises to set off a long and difficult battle this year over federal spending priorities.

Top Administration officials, going on the offensive a day after Bush outlined his budget plans, on Friday urged the Democrats who control Congress to join the White House in behind-the-scenes negotiations to decide which programs should be trimmed.

“I realize Congress may try and suggest it can’t be done,” White House Chief of Staff John H. Sununu said on a television interview program. “But I think we are ready to sit down, negotiate and work with whatever slight differences they might have on the budget.”

The differences, however, will not be slight. The Bush Administration is putting much of the budget-cutting onus on Congress by proposing a “flexible freeze” that would require lawmakers to pare roughly 7.2% from a variety of government programs that total $136 billion.

Just to counteract the effect of inflation on those programs, lawmakers would need to find $9.8 billion in cuts, said Richard G. Darman, director of the White House’s Office of Management and Budget. Those reductions would come on top of the $11.8 billion in specific savings that Bush proposed.

“This is not a flexible freeze--it’s a flexible squeeze,” said Rep. Leon E. Panetta (D-Monterey), chairman of the House Budget Committee.

Senate Budget Committee Chairman Jim Sasser (D-Tenn.) accused the White House of ducking hard questions by not identifying which programs it believes should be cut to provide the money for Bush’s new domestic offerings.

He also charged Bush with misleading the public about his “kinder and gentler” agenda for the government because some of his initiatives do not, according to the White House budget, have any new money behind them.

Sasser pointed out that Bush, who wants to be known as the “education President,” submitted a budget plan that “calls for spending $100 million less (on the Education Department) than the Reagan budget.”

“This is a thousand points of light,” Sasser charged, “without the batteries.”

The Bush document, Sasser added, should be considered an “opening gambit” in a long series of discussions between the Administration and Capitol Hill on how to reduce the federal deficit and where available money should go. The Democratic budget leaders, seeking more specific information from the Administration before beginning serious negotiations, invited Darman for private talks Monday on Capitol Hill.

But Sen. Pete V. Domenici of New Mexico, ranking Republican member of the Senate Budget Committee, defended Bush’s budget.

“I believe this is a good approach. There’s more room for negotiation this way,” Domenici said. But he distanced himself from some of Bush’s proposals, questioning the demand to pare $5 billion from projected Medicare spending as well as Bush’s planned one-year freeze on pensions of retired federal workers. “It won’t be a cakewalk or a joy ride,” Domenici said.

Darman stepped up his earlier warning to lawmakers that Bush is willing, if necessary, to accept the Gramm-Rudman balanced-budget law’s automatic, across-the-board spending cuts rather than accede to a tax increase to bring the deficit down. “Yes, unequivocally,” he replied to a reporter’s question on the issue. “We should be prepared to take (the automatic cuts to reach a $100-billion deficit target) because that’s the law.”

Darman also defended abandonment by the White House of the basic approach to the budget used over the last 15 years.

In the past, the White House first proposed specific reductions or increases in programs from a level known as “current services.” This is the amount of money that would be required to keep a program running in the same fashion. This usually assumed an adjustment for inflation and, in certain cases, for accommodating an increase in the number of people eligible for a program, such as Medicare.

Standard of Year Before

Bush no longer will use that level as the starting point of the budget process. Rather, the White House plans to assume that most programs will be funded at exactly the same amount of money they received the year before.

Thus, under Bush’s accounting language, keeping a domestic program even with inflation is an “increase” and failing to do so is not necessarily a “cut.”

“The system we’ve been using the past eight years doesn’t work,” Darman said. Lawmakers should first agree to cap at $136 billion the wide array of spending programs Bush left out of his specific budget recommendations.

After that, the White House and Congress can “talk about which ones are we going to raise, which ones are we going to lower?” within that overall limit. “If we use the current services habit of mind,” Darman said, “we won’t solve this problem.”

However, Bush did not seem to apply this same principle to military spending. In his speech Thursday night, he took credit for imposing a “one-year freeze in the military budget,” but his proposal actually allows Pentagon spending to rise with inflation that year.

In effect, while the fine print in Bush’s budget documents do make the necessary distinction, the White House is trying to define on its own terms what it means for a federal program to be cut or increased.

“The budget claims to ‘freeze’ defense while ‘increasing’ education,” stated a report prepared Friday by the Center on Budget and Policy Priorities, a liberal watchdog group. “In fact, defense would get a full inflation adjustment, while education would not.”

The center also pointed out that Bush claimed to be expanding the Medicaid program to include more pregnant women and children. But because his plan does not allow any additional federal money to accomplish that goal, “the budget effectively proposes to expand Medicaid coverage and make states pay 100% of the cost.”

Bush “only talked about the good things last night,” said Rep. Tony Coehlo (D-Merced), the third-ranking Democrat in the House. He “didn’t tell us about the bad things.”