Supplemental spending flap could delay Defense bill

In a skirmish with the Office of Management and Budget that could keep the fiscal 2002 Defense appropriations bill off the House floor this week, House Appropriations Committee sources said the panel would not move forward on the bill's emergency supplemental provisions without more information on plans for the administration's share of emergency funds.

Of $40 billion in emergency spending approved after the Sept. 11 attacks, appropriators gave the White House control over the first $20 billion and planned to place the second $20 billion in a separate title of the fiscal 2002 Defense bill, which was slated for the House floor later this week.

But House sources said the Defense bill cannot move until the administration indicates how it will allocate the remainder of its $20 billion. Until then, appropriators said they could not decide how to spend their $20 billion, in the Defense bill.

Complicating the potential delay, the Senate Appropriations Committee is awaiting House action before marking up a Senate Defense bill. If the Defense bill does not pass the House this week and the Senate continues to wait for the House, sources said the prospects for getting a final bill out of conference and to the president before Thanksgiving become increasingly dim.

Appropriators face a number of competing demands--from the Pentagon, the security and border control agencies, the public health community and the New York and Virginia delegations, among others--for the $20 billion in supplemental funds in the separate title of the Defense bill.

Appropriations sources from both parties said that not knowing how the administration plans to allocate the first $20 billion over which it has control makes the committee's task more difficult.

Complicating the task is a push by House Appropriations ranking member David Obey, D-Wis., to add billions more to the supplemental. Senate Appropriations Committee Chairman Robert Byrd, D-W.Va., is preparing to do the same in the Senate.

The post-Sept. 11 package was meant to respond to the terrorist attacks and begin preparing the nation for the war on terrorism. Negotiated by appropriators and OMB, it made the first $10 billion immediately available to the White House to allocate; the second $10 billion available to the White House in consultation with Congress, and the final $20 billion subject to the regular appropriations process. To date, the administration has allocated $8.8 billion, according to OMB.

Appropriations sources expect the administration to devote most of the money it has left to defense activities. On that assumption, appropriators would allocate more of the $20 billion Congress controls to domestic needs.

But appropriators said until they know the administration's spending plan, it is difficult for them to formulate their plan. Appropriators complain that the administration should have sent this information to the committee by now.

Committee frustration has reached the point where some are even floating the idea of rescinding part of the first $20 billion and reclaiming it for Congress to allocate.

Meanwhile, on the budget front, Senate Budget Chairman Kent Conrad, D-N.D., and House Budget Committee ranking member John Spratt, D-S.C., expressed concern about reduced fiscal 2001 budget surplus numbers released by OMB Monday.

OMB calculated the total surplus for the fiscal year that ended Sept. 30 at $127 billion--or less than half the agency's April surplus projection of $281 billion, and significantly less than the fiscal 2000 surplus of $237 billion.

Conrad said the latest CBO numbers "again alert us to the nation's deteriorating budget outlook. They tell us that we need an economic stimulus package that provides an immediate boost to the economy without abandoning long-term fiscal discipline and further worsening our budget situation."

Conrad, who also sits on the Finance Committee, called on President Bush "to show real leadership" on the economic front by rejecting the $100 billion in tax cuts approved by the House.

Spratt was equally critical of the tax cut package the House narrowly approved last week--and of the $1.35 trillion, 10-year cut Republicans pushed through Congress in the spring.

The tax cuts, combined with the economic slowdown and the added costs of the war on terrorism, put the federal budget "on a path of structural deficits and rising debt," Spratt said.