House, Senate face budget maze

As Congress gears up for what could be one of the most punishing budget battles in recent memory, top leaders and budget writers in the House and Senate face divergent--but equally complicated--challenges.

In the House, GOP leaders and Budget Committee Chairman Jim Nussle, R-Iowa, are intent on producing a balanced budget plan, but must grapple with how to define and arrive at balance without losing more than a handful of GOP votes.

In the Senate, meanwhile, top Democrats and Budget Committee Chairman Kent Conrad, D-N.D., have to write a plan consistent with their criticisms of President Bush's budget, without causing political heartburn for the 12 Democrats who voted for the tax cut Democrats blame for the current deficit projections.

House Republicans have a somewhat easier task, if only because they have Bush's budget--and his soaring wartime popularity--to rally around. And while their majority may be a slim six votes, they have more margin for error than Senate Democrats, who hold only a one-vote advantage in a chamber where complicated rules and points of order make the annual budget debate a grueling process.

After a series of listening sessions with GOP members, Chief Deputy Majority Whip Roy Blunt, R-Mo., said roughly 80 members of the Republican Conference "really want us to do our best to balance the budget." This will be no easy task, Blunt conceded, since members want to spend more than Bush does for a Medicare prescription drug plan, highway construction and special education--among other increases Republicans must make room for within a balanced budget.

Another GOP priority, according to Budget Vice Chairman John Sununu, R-N.H., is making permanent last year's $1.35 trillion tax cut--something the president's budget provides.

To achieve a balanced budget while increasing spending for transportation and other domestic priorities, GOP leadership aides concede they will have to be creative in how they define "balance." But whether a balanced budget is in balance with money for a stimulus plan in a reserve fund, without counting war- related spending, or using Office of Management and Budget instead of Congressional Budget Office numbers, aides said Republican members have made their wishes clear.

"Members don't want to vote for a budget that isn't balanced, [doesn't spend Social Security]," said one aide. "I don't know how we pass a budget if we don't try to balance it."

Republicans were willing in 1995 to shut down the federal government rather than use what they considered the Clinton administration's politicized OMB numbers, instead of CBO's. This year, they are primed to adopt OMB's more favorable numbers and are confident the debate over which set to use is too arcane to concern most voters.

OMB's baseline puts the president's fiscal 2003 budget request just $3 billion in deficit without the $77 billion it attributes to the stimulus plan.

CBO's current services baseline--which assumes no policy changes and predicts spending growth at the rate of inflation-- projects a $21 billion deficit for fiscal 2003. And when CBO issues its estimate Wednesday, the president's budget is expected to go another $50 billion to $60 billion into the red.

Said Sununu, "I think the debate between OMB and CBO numbers is the ultimate in inside-the-beltway hoo-hah."

Citing the lessons of the government shutdown, the leadership aide commented, "We learned the hard way that nobody cares" which numbers Congress uses.

Another GOP aide took a different view: "I'd be surprised [if Republicans used OMB numbers instead of CBO]. I think most members feel that credibility-wise, we should use CBO scoring, especially in light of Enron [and the accounting scandal]. There's no way to win that argument, even if it's defensible. We'd get Enroned."

The aide added: "The story at election time is the `02 budget--in October we'll know what the final `02 numbers are. And that's really what voters are going to be hearing about when they go into the voting booth, not the `03 budget resolution; `02 will be what defines what the deficit situation is, going into the election."

In the Senate, where Conrad and Majority Leader Tom Daschle, D-S.D., must pass their first budget resolution since becoming the majority, the obstacles to passage are daunting--and the bar set by Democratic leaders' criticism of Bush's budget is high.

Conrad has called the president's budget "irresponsible in the extreme," for relying on Social Security and Medicare trust fund surpluses to help pay for the regular operations of government.

Yet to put even the Social Security surplus out of reach could mean cuts elsewhere. That could be unpalatable to Democrats, who say the president does not spend enough on transportation, education, job training and local law enforcement, among other things.

Further complicating the task of writing a budget that the 51- member Democratic Caucus can support, several Democratic senators who backed Bush's tax cut last year--including Finance Committee Chairman Baucus of Montana; Daschle's fellow South Dakotan, Sen. Tim Johnson; and Missouri Sen. Jean Carnahan--now face tough re-election contests.

Even getting a budget resolution through the Budget Committee will be tough for Conrad. He may have a one-vote majority, but he also must contend with two independent-minded, balanced-budget hawks, Sens. Ernest (Fritz) Hollings of South Carolina and Russell Feingold of Wisconsin, as well as powerful Appropriations Chairman Byrd.

Conrad was optimistic late last week. "I feel as though I can get a budget through the committee," he said.

But he was less confident about his odds on the floor. "This is a very difficult year for any multiyear budget resolution" because of the twin uncertainties of the war and the recession, he said.

Conrad plans to include a trigger in his budget that would prompt Congress to act--or to make a decision not to act--rather than draw on Social Security surpluses for regular government spending.

To avoid the charge that canceling phase-in of the tax cut is tantamount to raising taxes, Conrad's trigger would not specify what Congress should do to keep from borrowing from the trust fund.

But Conrad, who has made protecting the trust funds his mantra, emphasized that his budget does not rely on the trigger to keep the government from drawing on Social Security surpluses.

"Mine does not do that, even without the trigger," he said. As for the details, however, Conrad has remained mum, except to say he would restrain all spending, both discretionary and mandatory.