Speaking before a seminar on the outlook for spending and tax policy in 2002 sponsored by Fleishman-Hillard, Dyer also suggested that, to keep to the budget resolution's $768 billion FY03 discretionary spending ceiling, appropriators may have to cut the defense number of $379 billion to meet bipartisan pressure to spend more on non-defense programs than the budget resolution allows.
"Can we live with 768 [billion]? Maybe. Will we get more? Possibly," Dyer said. "Can we reduce defense in a time of war? That is the choice that will face policy makers on my committee." Otherwise, Dyer suggested that, as in years past, appropriators of both parties and the White House would have to negotiate a new, higher spending figure.
Dyer pointed out that the GOP budget calls for increasing defense spending by 13 percent over fiscal 2002, compared with a 1 percent increase for non-defense programs, despite bipartisan support for directing more money to priorities such as health research, Pell grants, NASA, veterans health benefits and highway construction.
Dyer said the FY02 supplemental request would come at the end of the week with a price tag of $20 billion to $25 billion--with roughly $12 billion to $14 billion going to defense, $2 billion to $4 billion to airport security, at least $1 billion to foreign aid and $1 billion to make up the short fall in Pell grant funding.
Former White House Chief of Staff Panetta, who also spoke on the panel, predicted Bush would at least get the $48 billion defense increase he is seeking this year, if not more, while an election-year Congress would make sure to get more non-defense dollars in the bargain. "Make no mistake," Leon Panetta declared, "The president will not only get his [defense] number, but the Congress will probably add even more. And he's not going to get the Congress to say we're going to screw non-defense in the process. They're just not going to do it," Panetta added.
Stan Collender, managing director of Fleishman-Hillard's federal budget consulting group and a Government Executive columnist, predicted that total FY03 discretionary spending could hit $800 billion.
In an election year, when Bush "has essentially given everybody a free pass on the deficit" and the prospects for a House-Senate budget agreement are "zero," Collender said the result would be "a much higher deficit than anyone is admitting," which in turn would lead to a larger federal debt than now projected and significantly higher federal interest payments on that debt.
"This will come back to bite somebody," Collender said, in the form of higher interest rates that eventually could get consumers and homeowners angry enough to put the budget deficit back at the top of Congress' agenda. Otherwise, Collender forecast "a decade of refighting this battle and suffering the consequences of it."