House budget chair to propose balanced budget—sort of

House Budget Committee Chairman Jim Nussle, R-Iowa, and Majority Whip Tom DeLay, R-Texas, Tuesday confirmed that Nussle will present a fiscal 2003 budget resolution that is balanced--except for "what we did in a bipartisan way last week, and have done since Sept. 11," said Nussle. That was a reference to the $43 billion 2003 cost of the economic stimulus plan Congress passed last week and to the added expenses of fighting the war on terrorism and defending the homeland incurred since the terrorist attacks.

In separate remarks, House Majority Leader Dick Armey, R-Texas, told reporters the GOP budget would reflect national priorities of defense and economic security.

"We are committed to balancing a surplus budget," Armey said. "We also know that the first, best way … [to have] a surplus budget is to have a growing economy. But we are also acutely aware that we are still facing a national, international war on terrorism."

Nussle and DeLay said the House budget resolution, which is scheduled for markup Wednesday, will contain a "blueprint" for balancing the budget and returning to debt reduction "as soon as possible."

Nussle also confirmed he plans to use Office of Management and Budget numbers rather than the Congressional Budget Office's more pessimistic projections in the budget--saying CBO "has demonstrated a level of inaccuracy in its projections that has been frustrating."

Nussle also said he will adopt the president's proposed defense discretionary spending level, including the $10 billion emergency reserve fund Bush requested for future fiscal 2003 war-related expenses. But appropriators bitterly oppose the creation of such a fund as encroaching on their jurisdiction. An Appropriations Committee spokesman explained: "We want a number free and clear--no hoops, no strings attached. That's not the role of the Budget Committee." Also Tuesday, CBO released its monthly budget review showing that, in the first five months of fiscal 2002, the federal government ran a deficit of $68 billion, compared to a $26 billion surplus in the same period last year. CBO projected that, with enactment of the economic stimulus bill, the government will end 2002 with a deficit of about $46 billion.

For the month of February, CBO estimated the deficit at $75 billion, or $27 billion more than the deficit in February 2001. Revenues in February fell short of last February's total by about $14 billion; CBO attributed roughly $5 billion of that decline to last year's income tax cuts. Another $5 billion was due to an increase in refunds of individual income taxes in February, traditionally the first month when taxpayers receive substantial refunds from filing returns.

On the outlay side of the budget, CBO estimated defense spending was $3 billion higher than last February, while combined spending for Medicare, Medicaid, Social Security and unemployment compensation rose by $6 billion. Refundable tax credits totaling $16 billion were also paid out last month, according to CBO.