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President Putting ‘Big’ Back in Government

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Times Staff Writer

Even as President Bush proposes significant cuts in healthcare, farm subsidies and other domestic programs, his new budget makes one thing clear about the legacy of his first term in the White House: The era of big government is back.

Bush’s $2.57-trillion budget for 2006, if approved by Congress, would be more than a third bigger than the 2001 budget he inherited four years ago. It is a monument to how much Republicans’ guiding fiscal philosophy has changed over the 10 years since the GOP’s Contract With America called for a balanced budget and abolition of entire Cabinet agencies.

No longer are Republicans arguing with Democrats about whether government should be big or small. Instead, they are at odds over what kind of big government the U.S. should have.

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“This Republican Party is much less fiscally conservative than the one that took Congress 10 years ago,” said Brian M. Riedl, a budget analyst at the Heritage Foundation, a conservative research and policy center in Washington. “That Congress believed in eliminating entire departments that weren’t justified. You don’t hear that these days. I wish we did.”

Bush is releasing his budget at a time when many fiscal conservatives in his party are dismayed by how much he has allowed federal spending and the deficit to rise during his first term in the White House. This vocal but outnumbered faction of the GOP was furious when, in 2003, Bush signed a big increase in federal farm subsidies and pushed Congress to expand Medicare to cover prescription drug benefits.

In this budget, Bush has moved to placate those critics by restating his promise to cut the deficit in half by 2009; by pledging to abolish or cut spending for 150 programs; and by taking on fast-growing entitlements such as farm subsidies and Medicaid.

But many analysts view those promises with skepticism because, they say, Bush in his first term had a disappointing record of confronting Congress on popular spending programs. He has never vetoed a bill, making him the first president so restrained since James Garfield, who was shot to death after less than a year in office.

“This is a promise in which his position so far is not credible,” said William A. Niskanen, chairman of the Cato Institute, a libertarian think tank, and a former economic advisor to President Reagan. “President Bush also promised to reduce the deficit in half last year, but it went up $15 billion.”

Much of the deficit growth during Bush’s first term was the result of four rounds of tax cuts and increases in defense and domestic security programs after the Sept. 11 attacks. Bush and fellow Republicans have argued for the last three years that eliminating the deficit had to take a back seat in the budget because the country was at war and the economy was sagging. Now that the economy has improved and Iraq has elected its own government, the pressure is on Bush to combat the deficit.

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However, Bush’s budget projections likely understate future deficits as they do not include the full costs of three priorities at the core of what he seeks as his second-term legacy: ongoing military operations in Iraq and Afghanistan, making his 2001 and 2003 tax cuts permanent, and overhauling Social Security.

And even where Bush is pushing to reduce spending, analysts say, there may be less there than meets the eye.

Bush is right in saying that his budget is “very tight” -- but only for domestic discretionary programs, which are the ones that Congress controls with annual appropriations bills. That category makes up about 17% of the budget. Those programs would be cut by 1%. But defense would get an increase of almost 5% -- bringing its overall growth to 41% since 2001. Spending for domestic security would grow nearly 7% over last year. Medicare is on track to increase by $50 billion, about 17%.

Bush says those selective increases and cuts amount to “setting priorities.” Democrats say they confirm their worst fears that the deficit is being used only as a pretext for cutting programs favored by Democrats and their constituencies -- such as Amtrak trains, which are particularly popular along the East Coast; Medicaid programs, which serve the poor; and job training programs, which are backed by labor unions.

“What this president is doing is what Republican presidents and Congresses have been doing for a generation: using the budget deficit to justify the destruction of programs the American people trust and rely on,” said John Lawrence, Democratic staff director of the House Committee on Education and the Workforce.

Democrats may not be alone in resisting Bush’s domestic spending cuts. Republicans have joined them in blocking past efforts to abolish popular programs. Of the 65 programs Bush proposed eliminating last year, Congress ultimately killed four.

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Republicans are already squawking.

“Programs like Amtrak, beach replenishment and education funding have so much support in Congress that I believe the funding will be restored,” said Rep. Michael N. Castle (R-Del.).

In defending his budget-cutting proposals, Bush is offering a rationale far different from the root-and-branch, antigovernment rhetoric Republicans used 10 years ago. Bush argues that his cuts are driven by a managerial interest in eliminating waste, duplication and ineffective programs.

“I fully understand that sometimes it’s hard to eliminate a program that sounds good,” Bush said Monday. “The important question that needs to be asked for all constituencies is whether or not the programs achieve a certain result.”

That is a far cry from the rhetoric Republicans used in 1995, when their government-slashing fervor was exemplified by former Rep. Bob Livingston (R-La.), the House Appropriations Committee chairman who brought a machete to his first panel meeting to dramatize his commitment to cutting programs. That year, the Republican-controlled Congress abolished 270 programs. They cut discretionary spending by $12 billion -- the only year since Republicans took control of Congress that spending did not grow.

Republicans’ commitment to eliminating the deficit, a cornerstone of the Contract With America, also seems a thing of the past. Party members now argue that the deficit -- although it is a record in absolute numbers -- is manageable because, when measured as a share of the economy, it is not as large as Reagan’s 1983 deficit.

But Stanley E. Collender, a budget analyst with Financial Dynamics, a business communications firm in Washington, said that amounted to “using the budget failure of one Republican to make the large deficits of another appear to be less troubling.

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“President Bush would never admit this, but he has transformed the party into the party of permanent big deficits,” he said.

A key question is whether that prospect spooks Republicans into taking more aggressive steps to reduce the deficit and curb spending.

Ironically, the initiatives that might suffer are the cornerstones of Bush’s second-term agenda. Some Republicans already are balking at his Social Security overhaul because of its high transition costs. And even some Bush loyalists -- including Sen. Pete V. Domenici (R-N.M.), former chairman of the Senate Budget Committee -- are having second thoughts about Bush’s proposal to make his tax cuts permanent.

Said Steve Bell, Domenici’s chief of staff: “These deficits are serious business.”

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