OMB director insists Congress stick to House spending target

Facing down a group of Republican moderates who have openly criticized the administration's budget this year, Office of Management and Budget Director Mitch Daniels reiterated Wednesday that the White House still considers the fiscal 2003 House-passed budget resolution total of $759 billion a "ceiling" that should not be exceeded this year.

"No ifs, ands or buts," said Daniels, in a speech to the Republican Main Street Partnership.

Daniels said the nearly $13.5 billion the Senate is seeking above the House total is "unwise and unacceptable," as it would add $180 billion to the baseline over the next decade-the cost of a farm bill or the difference between competing prescription drug proposals.

Daniels asked the group to stand behind the administration to help "restore the principle of paying for what you do," noting that the White House intends to oppose drought aid, Medicare givebacks or any other new spending proposal that is not offset with corresponding spending cuts.

He also said highway funding should remain at $27.7 billion, which he described as the "right and proper level," despite efforts to increase it by $4 billion.

But House Transportation and Infrastructure Committee Chairman Don Young, R-Alaska, ranking member James Oberstar, D-Minn., Highways and Transit Subcommittee Chairman Thomas Petri, R-Wis., and subcommittee ranking member Robert Borski, D-Pa., warned Speaker Dennis Hastert, R-Ill., and Minority Leader Dick Gephardt, D-Mo., in a letter Wednesday that they and many committee members would not support a CR unless it provides $31.8 billion.

A handful of lawmakers questioned Daniels, particularly on education spending. Rep. Michael Castle, R-Del., chairman of the House Education and the Workforce Education Reform Subcommittee, asked why the administration chose not to fully fund last year's No Child Left Behind Act after the legislation was called one of the president's top priorities.

Daniels said it was "nothing uncommon" not to fully fund authorization because "it takes time to catch up" to the new spending levels. He also said there was a "lot of excavating we could do" to the fiscal 2003 Labor-HHS spending bill, which he called "rife with underperforming growth," to help boost education accounts to levels GOP moderates would find more acceptable.

Labor-HHS Appropriations Subcommittee Chairman Ralph Regula, R-Ohio, then challenged Daniels to come up with a list of programs that could be cut to help make up the $6 billion difference that separates the Senate's 2003 Labor-HHS spending bill from the administration's request. Regula also quizzed Daniels on how he would conference the bill, remembering that Congress "wants to reflect the members' priorities," not only those of the administration.

Daniels responded that the administration would "stand behind the House" when it came time for bargaining on the measure and that the White House remains open to moving money from different programs to pay for more education spending "so long as [the $759 billion ceiling] is not exploded in the process."

Daniels also said that economic realities-such as a huge decline in federal revenues-require Washington to rethink its approach to fiscal matters and to hold the line on spending.

According to Daniels, even when last year's tax cut and this year's stimulus package are factored out, federal revenues in fiscal 2002 were $183 billion less than what was projected at the end of the Clinton administration's tenure thanks to the declining stock market and other economic factors.

"It's time for this government to respond to changed circumstances by changing our own plans, hopes and visions, at least temporarily," Daniels said.