Budget Sets Risky Election Strategy

President Bush’s austere federal budget proposal, with its bold effort to curb spending on Medicare and other popular programs, establishes an unusual and potentially risky election-year strategy for congressional Republicans.

In calling for tough fiscal medicine 10 months before midterm elections, Bush is betting that voters will accept painful measures in the name of controlling government growth.

That calculation aligns Bush with conservative lawmakers, especially in the House, who believe that an offensive against federal spending is crucial to generating a large turnout from the Republican base in November’s election.

“I think the American people are more concerned about overspending than anything else,” said Rep. Paul D. Ryan (R-Wis.). “Politically, the right thing to do this year is also the popular thing to do, and that is to cut spending.”

But Bush’s push to reduce spending -- while making permanent the sweeping tax cuts from his first term that are due to expire by 2011 -- creates excruciating choices for centrist Republicans in Congress caught between demands for party discipline and concerns that swing voters may recoil against elements of the plan, such as the Medicare reductions.

The plan also is likely to inspire more conflict between the parties than almost any domestic proposal Bush outlined in his State of the Union address last week.

Already, candidates in House and Senate races are sparring about the 2006 budget that finally passed Congress on Wednesday without a single Democratic vote. The plan reduces spending for student college loans and Medicaid, the program that benefits low-income people and the disabled.

The president’s $2.77-trillion budget for 2007 would eliminate or sharply curtail 141 programs. He proposed $65 billion in cuts in the rate of growth of federal benefit programs over the next five years -- $36 billion of it from Medicare. Taxes would be reduced by $280 billion during the same period -- and by $1.4 trillion over the subsequent five years.

The budget proposal, with its aggressive challenge to programs that Democrats favor, seems certain to elevate disputes over tax and spending priorities to the center of this year’s campaign debates.

“It is a real defining line,” said Jay Reiff, campaign manager for Bob Casey Jr., the Democratic challenger to Sen. Rick Santorum (R-Pa). “It really defines what this battle is about.”

Bush’s fiscal record has drawn criticism from both parties.

Conservatives grumble because total federal spending has jumped from about $1.9 trillion in 2001 to an estimated $2.7 trillion this year.

Democrats complain that after inheriting three consecutive years of federal surpluses, Bush produced deficits totaling $1.5 trillion in the last four years -- with another $354 billion in red ink forecast for 2007, even after the proposed new spending cuts.

Although Democrats primarily blame Bush’s tax cuts for the reversal, Bush has proposed to dig out of the hole solely through spending reductions -- a decision that has created sharp conflict between the parties.

Amid the overall spending growth, Bush has pleased conservatives and angered Democrats by proposing severe restraints on non-defense discretionary spending -- the programs that fund the federal government’s routine operations.

Last fall, Bush backed the effort by conservatives to impose significant reductions on so-called entitlement spending programs, such as Medicaid and student loans. Those proposals passed Congress by the thinnest of margins, with some moderate Republicans voting against the package.

Bush’s 2007 budget plan may inspire even more anxiety among GOP legislators because it would squeeze most of its entitlement savings from Medicare, the giant federal system that funds healthcare for seniors.

“For my state of Maine, some of these proposed cuts to Medicare

Bush did not attempt to curb Medicare spending in either of the budgets he offered in 2002 or 2004, the previous two election years during his presidency. To the contrary, in both budgets he supported an expansion of Medicare by adding a prescription drug benefit for seniors.

Bush’s new budget proposes to slow the growth in Medicare spending by nearly $36 billion over the next five years. More significantly, it also includes proposals that would raise Medicare premiums more quickly for certain seniors and impose automatic spending cuts on the program if its costs grow too large.

Conservatives see fiscal discipline as not only good policy but good politics, even in an election year.

“We sell ourselves as the party of fiscal responsibility,” said Rep. Jeff Flake (R-Ariz.). “I would think the bigger danger for us politically is if voters stay home because they don’t see a genuine difference between the parties.”

But in states such as Minnesota, Montana, Missouri and Pennsylvania, Democratic Senate candidates are charging that Bush and the GOP Congress are hurting programs that benefit middle-class families while attempting to preserve tax cuts for the affluent.

In Ohio, Democratic Rep. Sherrod Brown, who’s bidding for the nomination to oppose Republican Sen. Mike DeWine in November’s election, charged that Bush’s new budget “is not just irresponsible, it’s immoral.”

Many Republicans express confidence that the party can weather these criticisms. Trent Duffy, a White House spokesman, said it would be difficult for Democrats to portray Republicans as a threat to Medicare when Bush and the GOP Congress added the prescription drug benefit to the program.

“The overall bottom line is that federal government support for the elderly has gone up significantly,” Duffy said.

Other Republicans say that public support for fiscal restraint will trump any concern over reductions in individual programs.

“That argument failed [Democrats] in 2002, it failed them in 2004, and it will fail them again,” said Scott Howell, the media consultant for Sen. Jim Talent (R-Mo.) and other GOP candidates.

Still, the political sensitivity of Medicare could make many Republicans move cautiously on the Bush proposals.

The public backlash against the GOP’s effort to wring savings from Medicare while proposing tax cuts helped break the momentum of the Republican congressional majority in 1995 and send Bill Clinton on his trajectory to reelection the next year.

And even before Bush unveiled his new budget, Republicans were nervous about their standing among seniors because of the opposition to Bush’s Social Security restructuring plan last year and widespread complaints over the implementation of the new prescription drug plan.

Senate Budget Committee Chairman Judd Gregg (R-N.H.) acknowledged that the president’s Medicare proposals represented a “challenging blueprint.”

But Gregg, an ardent proponent of limiting spending, insisted, “Republicans should be enthusiastic about it because that’s one of the things we talk about as a party.”

David Sloane, the government relations director at AARP, the giant advocacy group for seniors, predicted that Bush and supporters such as Gregg would not amass enough votes to seriously push Medicare reductions this year.

“In an election year, there isn’t a great deal of likelihood Congress is going to have the stomach to take this stuff up,” Sloane said.

Still, Bush has framed a choice that could drive the domestic debate in many campaigns this fall.

Veteran GOP strategist Jim Dyke, an advisor to Senate Majority Leader Bill Frist (R-Tenn.), said he expected such a debate to pivot on which side could best define the terms of discussion.

“If you are using [the Democrats’] dictionary, and the debate is that [Republicans] want to take seniors’ benefits away and hurt people who can’t afford it, then that is not a good thing” for GOP candidates, Dyke said.

But if Republicans can “continue to explain the importance of controlling spending in the context of the deficits,” he said, “and the importance of tax relief to economic growth, then it is an across-the-board winner.”

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Winners and losers

President Bush proposed

a $2.77-trillion budget with

a $354-billion deficit in 2007.

Budget gains

* Defense, which would rise 7%, to $439.3 billion, not including costs tied to military action in Iraq and Afghanistan.

* Homeland Security, up 6%, to $42.7 billion. California, as a region judged at higher risk of attack, would benefit from additional anti-terrorism money.

Budget losses

* Medicare would be trimmed almost $36 billion over five years by reducing hospital and nursing-home costs.

* California and other states would receive no federal funding to help pay for jailing illegal immigrants.

* Clean-water projects would receive less funding, a major concern for California officials.