GOP leaders hopeful of a nominally balanced budget

With less than a week before next Wednesday's scheduled House Budget Committee markup of the fiscal 2003 budget resolution, GOP leaders are quietly confident that despite the obstacles, they can produce at least a nominally balanced budget for next year.

Speaker Dennis Hastert, R-Ill., acknowledged Wednesday that as the House writes its budget plan, it faces unusual circumstances that make achieving balance difficult.

"We're in a time of war," he said. "We've had a downturn. We're in a recession. We've had a whole area of internal security we've been working on. These are extraordinary expenses." He added, "We're going to put those all in the jug, and shake it up, and see what we come up with ... Our goal is a balanced budget, but there are needs we need to take care of."

Republican Conference Chairman J. C. Watts of Oklahoma added momentum to the idea of setting aside the extra costs associated with the war on terrorism and homeland security to determine whether the budget is balanced.

"Whichever numbers you look at [Congressional Budget Office or Office of Management and Budget], when we are taking out what we're spending for security needs, we're going to be very close," Watts said. "I don't think we're going to be too far out of the lines."

Although the updated baseline CBO released Wednesday now projects small surpluses in 2002 and 2003 compared to small deficits in its January baseline, GOP leadership sources still expect that the House budget will rely on OMB's more favorable numbers to get to balance.

The plan that the House Budget Committee marks up next week may also provide for slightly more discretionary spending than President Bush proposed to accommodate such congressional priorities as highway construction, special education and veterans benefits. Bush did include as much money in his budget for these as Congress wants to spend.

It is also expected to increase the $190 billion that Bush proposed to create a Medicare prescription drug plan to at least $300 billion, the amount Congress set aside last year. And, according to a GOP source, it will also provide for some tax cuts, such as extenders, the research and experimentation tax credit and making permanent the estate tax repeal, if not other parts of last year's $1.35 trillion tax cut.

Another important element for Republicans will be answering likely Democratic charges that their budget uses Social Security surpluses to pay for tax cuts.

GOP leaders are still deciding whether to include their idea to provide certificates guaranteeing Social Security benefits in the budget plan itself, or to have a separate vote on it the same week the House votes on the budget.

Said Hastert, "We're going to protect that money, we're going to protect the benefits. How you do that ... we're going to take a look at that and make sure that surely happens."

Hastert also acknowledged that the House would have to vote to raise the debt limit some time this session, and indicated GOP leaders would likely attach it to a fiscal 2002 supplemental spending bill.