House appropriators: Domestic spending freeze won't dent deficit

Holding non-defense, non-homeland security discretionary spending to less than 1 percent, as the Bush administration will propose Monday, would make hardly a dent in the Congressional Budget Office's projected $362 billion fiscal 2005 deficit, according to documents to be distributed to lawmakers by the House Appropriations Committee at this weekend's bicameral GOP retreat in Philadelphia.

At the same time, it could lead to unpopular sacrifices, according to those documents. "The House Appropriations Committee can live with this target, but we need to be realistic about the impact of this proposal," one document noted.

Even a freeze on domestic discretionary spending, as some conservatives advocate, would lower the deficit by less than $3 billion, according to the Appropriations Committee.

Appropriators note that discretionary spending accounts for only one-third of the $2.3 trillion federal budget, with mandatory entitlements encompassing the vast majority of spending, and defense and homeland security discretionary spending only 17 percent of the total budget.

The document represents the first salvo in what is expected to be a nasty election-year budget cycle, and the Appropriations Committee spares none of its traditional rivals -- the White House or the Budget and Transportation and Infrastructure committees. Office of Management and Budget Director Joshua Bolten will present the administration's fiscal 2005 budget proposals to members at the retreat, in advance of Monday's official release.

"It's not meant to provoke anyone, it's merely laying out the facts," an Appropriations spokesman said of the committee's presentation.

While the administration will propose to scale back the growth of domestic discretionary spending, it also will propose significant increases in discretionary programs, such as international HIV/AIDS funding and the NASA Mars mission, and even larger increases in defense and homeland security.

These programs, appropriators wrote, will have to vie for space in the budget with "traditional congressional priorities like veterans' medical care, medical research, law enforcement and special education."

There is also the unspoken threat that members might have to sacrifice home-state earmarks if the pot of discretionary funds is kept threadbare. "With 1 percent growth in non-defense discretionary, members should have very low expectations for congressional project funding, especially in an election year," the Appropriations Committee stated.

The document urges the Budget Committee to draft a fiscal 2005 budget resolution that is "gimmick free" and avoids unrealistic assumptions of available funds. Appropriators charge that the fiscal 2004 budget resolution led to a spat over veterans' medical care during debate over the House's VA-HUD bill that was eventually addressed with a $3.1 billion addition to the fiscal 2004 omnibus spending bill. A Budget Committee spokesman countered that appropriators had no trouble finding room for earmarked projects.

But the appropriators' biggest target is the Transportation and Infrastructure Committee and its $375 billion, six-year reauthorization of federal surface transportation programs, which dwarfs the administration's $247 billion proposal. "The biggest budgetary challenge facing the Congress this year will be how to reauthorize highway programs in a fiscally responsible manner," the document stated.

The Transportation and Infrastructure Committee bill -- whose cost House GOP leaders also want to rein in -- would represent a 72 percent increase over current transportation funding, appropriators note. A Transportation and Infrastructure Committee spokesman noted highway and transit programs are financed by gasoline taxes and would not come from discretionary funds. "It only affects people who pay for gas," he said, although the increases would affect the deficit like other mandatory programs such as Medicare and Medicaid.

Meanwhile, the liberal-leaning Center on Budget and Policy Priorities said in a report Wednesday that new CBO projections of a $1.9 trillion deficit incurred between fiscal 2005 and 2014 is "unrealistically optimistic," and omit $3.3 billion in costs such as extensions of tax cuts, alternative minimum tax relief, and increased defense and international aid spending. A more realistic deficit projection would be $5.2 trillion over 10 years, the Center said, with deficits never falling below $400 billion in one year and exceeding $700 billion by fiscal 2014.

OMB is expected to produce a budget forecast for the next five fiscal years when it releases its budget Monday, with a fiscal 2004 deficit in excess of $500 billion, observers said. GOP budget writers will discuss over the weekend how long to write their fiscal 2005 budget resolution, with Senate Budget Committee Chairman Don Nickles, R-Okla., also favoring a five-year plan. The fiscal 2004 measure was a 10-year budget resolution.

House Budget Committee Chairman Jim Nussle, R-Iowa, did not express a preference, but said he would discuss the matter with Nickles and House Republicans during the retreat before making a decision.