‘Deficit Hawks’ Circling Highway Bill

President Bush and the Republican-controlled Congress are headed for a collision over the price tag of a massive transportation spending bill in the first test of the White House’s more determined drive to rein in federal spending.

Administration officials, worried about economic and political fallout from the record federal budget deficit, are using the $318-billion bill now before the Senate -- and a $375-billion measure proposed in the House -- to make their stand.

The bill, expected to be one of the decade’s biggest public works measures, could be the first of many this year showing the power of the deficit to split congressional “deficit hawks” from those seeking funds for favorite projects. It is likely to be “one of the year’s defining issues of fiscal responsibility,” said budget expert Robert L. Bixby, and could lead to Bush’s first veto.

“There simply isn’t enough money to be spread around as generously as members of Congress would like,” said Bixby, head of the Concord Coalition, a budget watchdog group based in Arlington, Va. “And limited resources always provoke fights, even among friends.”

The bill creates a dilemma for GOP members of Congress: On the one hand, projects promising to ease traffic are always popular back home, especially in an election year. However, the bill comes only days after Bush, a fellow Republican up for reelection, proposed a fiscal year 2005 budget calling for greater fiscal discipline, including reducing this year’s $521-billion deficit by half within five years.

The bill also poses a problem for Bush. He wants to pass a highway bill, which he and others say will stimulate the economy, but he’s also under pressure from conservative supporters to take a tougher stand -- even against members of his own party -- to slow the expansion of federal spending.

“If the administration backs down, conservatives might rebel at yet another retreat on spending restraint,” Bixby said. “If the administration does not back down, the president might have to cast his first veto -- an embarrassment for the congressional leaders of his own party.”

Bush has proposed $256 billion in spending for bridge, highway and mass transit projects over the next six years. His advisors this week hinted they would recommend a veto if the bill approved by Congress required a gasoline tax increase or put the Treasury deeper into the red.

The Senate bill, however, enjoys the support of many of Bush’s GOP allies, including Senate Majority Leader Bill Frist of Tennessee, and is expected to be approved as early as next week. In the House, Rep. Don Young (R-Alaska), chairman of the House Transportation and Infrastructure Committee, is pushing for a $375-billion bill that calls for the unthinkable -- a gas-tax hike in an election year.

And rather than step back from his call for greater spending than the administration favors, Young told Bush in a letter Wednesday: “I am extremely disappointed with the ‘take it or leave it’ approach taken by your advisors.” Young urged Bush to seek “new and creative ways” to fund “one of the most essential programs” in government.

Lawmakers from both parties call the legislation critical to relieving traffic congestion and eliminating unsafe road conditions. They also say that it will stimulate economic growth, an administration priority.

Frist rejected pleas from conservative Republicans to delay the legislation, which they described as “potentially the biggest budget-busting spending bill the Senate will consider this entire year.”

If anything, it could grow even larger. Senators are considering attaching it to a sweeping energy bill that would provide at least $8 billion in tax breaks to promote conservation and production.

The last big transportation legislation, approved by Congress in 1998, was a six-year, $218-billion bill that represented a 40% spending increase. But at the time, the government was posting its first budget surplus in decades.

For California, the Senate bill would boost highway funding by 40%, or $6 billion, over the next six years, according to Sen. Barbara Boxer (D-Calif.).

Ultimately, the bill could run into trouble, and not just from deficit hawks who think it costs too much. Some lawmakers are angry that it doesn’t give their states enough money.