A Rare Accord: Almost Everyone Dislikes Budget

Deficit hawks are grousing over next year’s budget. Liberals are unhappy with it; so are conservatives. Proponents of truth in budgeting are shaking their heads.

As President Bush’s budget moves through Congress, about the only people who are holding their heads high are Republicans on the House Appropriations Committee, which secured House passage of all 12 of its annual spending bills before the August congressional recess.

But the Senate has passed only five of the bills, and the chances of having the full slate approved by Oct. 1, the beginning of the 2006 fiscal year, are vanishing.

Congress has at least spread unhappiness evenhandedly. It’s not every year that Senate Budget Committee Chairman Judd Gregg (R-N.H.) and Rep. David R. Obey of Wisconsin, the top-ranking Democrat on the House Appropriations Committee, agree that the budget process is off track.

Obey is unhappy that the 12 House-passed spending bills would kill 98 programs, many focused on helping the poor, and cut many others.

The maximum Pell grant for needy college students, he says, would rise by only $50, to $4,100 a year, when the average cost of a four-year public college has grown by $2,300 a year in the last four years.

“It’s a visible manifestation of a budget that gives priority to tax cuts for the wealthy over social services for people living on the edge,” Obey said.

Gregg, on the other hand, is upset that the Senate is reversing many of the House-passed cuts and adding new spending. During Senate debate of the energy bill, for example, he challenged a proposed amendment to compensate states for oil drilling rigs in their coastal waters as a violation of Congress’ spending ceilings.

When his challenge failed on a vote of 69 to 26, he said: “It’s fairly clear that, at least on the Senate side, there is less than robust support for fiscal discipline.”

Such votes demonstrate that even in a time of record deficits and the prospect of more of the same as the population ages, budgetary considerations often take a back seat.

As if to drive home the point, Congress passed a highway bill that, at a six-year cost of $30 billion more than President Bush sought, would pay for what Citizens Against Government Waste called “museums, bus stops, bike trails, and mass-transit boondoggles all over the country ... doled out based on political favoritism.”

Good economic news may reinforce Congress’ spending instincts. The administration recently announced that unexpected tax revenue would lower the 2005 deficit to $333 billion from the $412 billion estimated six months ago.

“I’m concerned that the economic news will make lawmakers lose their resolve to cut spending,” said Brian M. Riedl, a Heritage Foundation fellow who puts spending cuts at the top of his agenda. “But there’s no way the economy can grow fast enough to pay for projected growth in Medicaid, Medicare and Social Security.”

The programs on the House Appropriations Committee’s hit list -- from a $298-million emergency fund to help the poor pay their heating bills to a $1.5-million grant program to promote economic education in elementary and high schools -- are mostly from a similar list prepared by the White House.

The administration has expressed satisfaction with the House action.

However, the programs all have supporters, in many cases including Sen. Thad Cochran (R-Miss.), chairman of the Senate Appropriations Committee, which is in the process of undoing many of the House cuts.

The Senate committee has relied on some familiar budget gimmicks to mask the extent of its restorations. It has “saved” $3.3 billion in fiscal 2006 by postponing the final monthly benefit check under the Supplemental Security Income program for the elderly and disabled poor by a few days into the beginning of fiscal 2007.

It is preparing an artificially small defense bill -- about $7 billion low, by some estimates -- on the theory that Congress will make up the difference next year in a supplemental spending bill.

And when the administration acknowledged that it had not sought enough money for veterans’ healthcare, Congress voted a $1.5-billion appropriation that it classified as “emergency” so that it did not have to stay within the congressional budget.

Although the House has scheduled a large number of programs for extinction, most of them are small: They cost $4.6 billion this year in a $2.5-trillion budget. Eliminating them would shave barely 1% from a 2006 deficit estimated at $341 billion.

“They’ve made some tough choices, especially in the House, but they’ve made no real progress toward lowering the deficit,” said Maya MacGuineas, president of the Committee for a Responsible Budget, a group that presses for smaller deficits.

That, she said, requires going where the real money is: the military and the huge programs that entitle certain classes of people to federal benefits.

Defense has been largely untouchable during the war on terrorism. But in the budget passed in March to guide subsequent spending and tax bills, Congress for the first time since 1997 exercised its authority to order committees with responsibility for entitlement programs to prepare legislation to cut them.

The cuts were modest: about $35 billion over a five-year period when spending of this sort is expected to total nearly $6.6 trillion.

The deepest cut -- $10 billion, although none of it until 2007 -- is envisioned in the Medicaid health insurance program for the poor. But the cut would merely hold Medicaid’s growth, estimated under current law to be 8.3% a year over the next five years, to 8.1%.

What’s true on the spending side of the budget is true on the tax side as well: Supporters and opponents of tax cuts are unhappy with the way things are going.

The congressional budget made room for $106 billion in tax cuts over the next five years and ordered the Senate Finance Committee and the House Ways and Means Committee to include $70 billion of that in a bill to be written by Sept. 23.

The $70 billion would allow the extension of expiring tax breaks for capital gains and dividends as well as a few smaller items.

Most Democrats say there is no room for further tax cuts.

A dispute has broken out over a tax issue that would have no impact over the next five years: whether the estate tax, temporarily phased out by a 2001 law, should be put to death rather than allowed to spring back to life in 2011.

Senate Majority Leader Bill Frist (R-Tenn.) angered many conservatives by delaying a Senate vote on the repeal -- which the House has already approved -- until September.