Bush Faces Battle Cutting Spending Down to Size

President Bush’s struggle with Congress over the size of a tax cut may pale in comparison to a parallel fight that looms as lawmakers get back to work this week: how to get them to curb the growth of government spending as much as he wants.

While the tax cut debate has evolved into a typical fight along party lines, Bush’s drive to control federal spending is heading toward a bipartisan speed bump: the deep-seated impulse among legislators to pump more money into programs that are wildly popular back home.

“There are plenty of key differences between the two parties about the size and type of tax cut, but on spending issues, the lines have become increasingly blurred,” said Pete Sepp, a spokesman for the National Taxpayers Union, an advocacy group for lower taxes.

The budget plan recently approved by the Senate offers a road map of the political obstacles Bush faces in trying to get Congress to limit spending. The Senate plan would boost so-called discretionary spending 8% next year--double the hike Bush seeks--including increases in health, agriculture, education and defense programs that enjoy powerful bipartisan constituencies.

Bush has been blunt in denouncing the Senate’s free-spending ways.

“The trade-off is either you have priorities and keep discretionary spending at 4% and give people some of their money back, or you increase the size and scope of the federal government,” Bush told an audience in Connecticut last week.

But it is a measure of how hard it will be for Bush that so much ground was lost in the Senate--narrowly controlled by Republicans--so early in a long budget process that traditionally gets more profligate as the year progresses and detailed appropriations bills are enacted.

“If it’s 8% now, it will be 12% by the time we get to appropriations,” lamented one House Republican leadership aide.

It is also an emblem of how the Republican Party Bush now leads has changed since 1995, when then-House Speaker Newt Gingrich (R-Ga.) was the GOP’s titular chief. Then, Republicans were talking about abolishing entire Cabinet departments, ending farmers’ entitlements to federal aid, defunding the National Endowment for the Arts and more.

Such grand ambitions faded in the face of continuing popular support for much of what the government does. And the emergence of big and growing budget surpluses made it politically more difficult to argue for belt tightening. By the last two years of the Clinton administration, Congress was going on annual bipartisan spending sprees that increased the budget by 6% or more.

This year was supposed to be different, with the GOP in charge of both Congress and the White House. When the House considered Bush’s budget plan, Republicans rammed through a resolution that would mostly stick to his proposal to limit spending growth to 4%. But in the Senate, Bush could not hold the line; there, Republicans joined Democrats in loading up the budget with more and more money.

“That was a serious blow to the fiscally conservative, limited-government wing of the Republican Party,” said Stephen Moore of the Club for Growth, a conservative political group that supports tax cuts even deeper than Bush proposes. “Is Bush going to have any chance of constraining the spending appetite? Right now, the prospects don’t look good.”

Some Republicans blamed the Senate’s spending boosts on the power of Democrats in a chamber split 50-50 between the political parties. For example, the biggest spending increase--$225 billion more for education--passed when merely three Republicans joined with virtually all the Democrats to support it. But many of the add-ons were approved with substantial GOP support; all 50 Republicans backed an amendment that essentially doubled--to $300 billion--Bush’s request for a new Medicare prescription drug benefit. They also unanimously backed adding $63.5 billion for agriculture over 10 years. And a move to increase the Pentagon budget by $8.5 billion was approved 84 to 16.

Other amendments illustrated another powerful engine working against spending constraint: Virtually every senator seems to have a pet cause to finance. Sen. Bill Frist (R-Tenn.), a member of the GOP leadership, pushed an amendment to add $700 million for international programs to combat AIDS. Sen. Christopher S. Bond (R-Mo.) threw in another $1.4 billion for science.

Sen. Phil Gramm (R-Texas), a senior member of the Budget Committee, dismissed the Senate’s splurge as political posturing that ultimately would have little impact. “These budget debates have become vehicles for people to score political points,” Gramm said. “It was an exceptional spectacle this year.”

He predicted that most of the amendments would be dropped from the final budget, except for the ones increasing defense and agriculture spending. But other Republicans worry that the spending disputes may be even harder to resolve than the size of the tax cut.

“Spending might be, in some ways, more difficult to unravel,” said a senior Senate GOP aide.

Both the tax and spending issues will be addressed this week as congressional negotiators meet to resolve differences between the House and Senate budget resolutions. A resolution is a broad fiscal planning document that sets guidelines for tax and spending bills that are passed later in the year.

The Senate version also veered away from Bush’s call for a $1.6-trillion tax cut over 10 years, scaling back the figure to $1.2 trillion. The change was made in part to finance the additional spending sought by the Senate.

Bush and his allies will try to regain lost ground in the House-Senate negotiations. They are hoping that key swing senators who backed the smaller tax cut and the additional spending will return from their home states swayed by heavy lobbying that has been applied during Congress’ recess.

Bush has been trying to turn up the heat, saying the Senate’s action underscored a key argument for his larger tax cut. “Some members of the Senate are, unfortunately, proving the point I make all across the country: If you send it, they will spend it,” he said last week.

He pointed out that if Congress continued to increase spending at the rate the Senate proposed, the entire discretionary budget would double by 2010.

Bush will find allies in his effort to limit spending in the House, where Republicans traditionally have been more tightfisted.

“I’m not saying Republicans are saints, because our guys want to spend money too,” said Brenna Hapes, a spokeswoman for the House Budget Committee. “But if we’re going to reverse how things are done around here and get away from the idea that we’re going to grow government, this is the year to do it.”

Indeed, there is a cadre of conservative House Republicans that wants to spend even less than Bush. But when that group, the Republican Study Committee, proposed an alternative budget that would allow spending to grow only 2.9%, just 81 House members voted for it.

“I don’t think the Senate spending numbers are going to hold,” said Rep. John B. Shadegg (R-Ariz.), head of the study committee. “We on the House side are going to make it very clear . . . an 8% growth rate is simply not sustainable.”

But in the Senate, Budget Committee Chairman Pete V. Domenici (R-N.M.) has been saying for months that Bush’s 4% increase is not enough to pass the Senate. And Domenici continues to make that case in searching for a compromise.

An obvious middle ground would be to provide a smaller spending increase than the Senate sought--say 6%--and a slightly larger tax cut, say $1.4 trillion. But that still may be more spending than conservatives could swallow.

Said Gramm: “I’m not going to vote for that.”