House Budget Proposal $46 Billion Out of Balance

Despite improvements in the economy and pressure from conservatives to balance the federal budget, House Republicans late Wednesday endorsed a $2.1-trillion spending blueprint that would produce a $46-billion deficit in 2003.

The budget, which would fully fund large spending increases sought by President Bush for defense and homeland security, demonstrates how hard it will be for Congress to avoid deficits during a time of war--and in an election year.

Hopes for avoiding a rising tide of red ink had been boosted by recent signs that the economy is rebounding, boosting government receipts. But if even the GOP-controlled House, the strongest bastion of fiscal conservatives in Washington, cannot produce a balanced budget, analysts say there is virtually no chance that Congress can avoid running even deeper into the red.

The House Budget Committee approved the GOP-backed resolution on a party-line vote, 23-18, sending it to the full House for a vote next week. That marks the beginning of a congressional budget debate that is littered with political land mines for members of both parties, forcing them to choose between favored spending priorities and going ever deeper into debt.

“We want to be at balance [in the budget] in the worst way,” said House Budget Committee Chairman Jim Nussle (R-Iowa). “If it were not for Sept. 11, we would have a balanced budget.”

Conservative Republicans seem willing to swallow the proposed deficit because it largely stems from the cost of the economic stimulus bill signed into law last week; it included about $43 billion in business tax cuts and unemployment benefits for 2003.

“We are balancing this budget, with the exception of something to help the economy,” said Rep. John B. Shadegg (R-Ariz.).

Democrats, though, see potential political advantage in the House budget resolution’s call for tapping $831 billion in Social Security surpluses to pay for other government programs from 2003 to 2007. That would force Republicans to violate their oft-repeated promise to keep Social Security surpluses in a “lockbox”--meaning the money is off-limits for other purposes.

“So much for the lockbox,” said Rep. John M. Spratt Jr. of South Carolina, the ranking Democrat on the Budget Committee.

When the budget comes to the House floor, GOP leaders plan to add language to the resolution that would provide a guarantee--albeit one that is not legally binding--that the benefits of current Social Security recipients would never be cut.

Democrats, in control of the Senate, will face political challenges of their own when that chamber’s Budget Committee tries to draft an alternative spending plan in the coming weeks. While some Democratic leaders have blamed the big tax cut Bush pushed through Congress last year for bringing back deficit spending, they have been loath to propose altering the law.

That leaves Democrats with the choice of writing a budget with a deficit--violating their own pledge not to “raid” Social Security surpluses--or produce a budget they have balanced by cutting Bush’s defense requests or their party’s domestic priorities.

The political choices are so difficult--and the differences between the parties so deep--that many analysts predict that Congress won’t pass a budget resolution this year. That would mean lawmakers could write the year’s appropriation bills--the measures that fund government agencies--with no spending ceilings or other guideposts.

The budget resolution is the annual tool for setting congressional spending priorities. The resolution sets overall spending and revenue targets for broad categories of federal activities, such as defense, education and health. But other bills must be passed later in the year to appropriate money and change tax policy.

In line with Bush’s requests, the House GOP budget for next year calls for $394 billion in spending for the Pentagon--a 13% increase. It also includes $38 billion for homeland security--roughly doubling the current level.

The budget would increase spending for education and health, and would restore some of the cuts in highway spending that Bush proposed. It includes $350 billion over 10 years to provide prescription drug coverage under Medicare--up from the $190 billion Bush proposed.

But in other areas, the House budget calls for serious belt-tightening. It would reduce funding in energy, environment and other domestic programs.

While criticizing those spending restraints, Democrats stressed their support for Bush’s anti-terrorism policies.

“In the war against terrorism,” Spratt said, “we’re united behind the president and unstinting about the cost.”