OMB director warns Congress to restrain spending

Just days after sending the Bush administration's $27.1 billion fiscal 2002 emergency war supplemental to Congress, Office of Management and Budget Director Mitch Daniels Wednesday called on legislators to continue exercising spending restraint by not adding to the cost of the package.

Speaking to a U.S. Chamber of Commerce breakfast, Daniels also predicted the fiscal 2003 budget would come "very close to balance"--forecasting a deficit of "less than $50 billion"--even with the supplemental and recently enacted stimulus package, if Congress keeps to the $679 billion total discretionary spending limit the president set in his budget.

Daniels reiterated President Bush's position that "anything not directly related to the emergency would have to be offset" if it is added to the supplemental--but declined to threaten a veto if his admonition is ignored.

However, Daniels left little doubt about the administration's commitment to spending restraint, telling the Chamber, "We mean business about concentrating whatever increases are required on the real task at hand," the war on terrorism, and limiting to 2 percent increases elsewhere in the budget."

"No business as usual," Daniels warned about the coming appropriations cycle. "No guns and butter." The first test of that, he said, will be the supplemental.

Daniels also endorsed the bipartisan effort in the Senate to reinstate spending caps for fiscal 2003. Although the Senate Budget Committee failed, on a tie vote, to adopt a five-year extension of the caps with tough enforcement language offered by Sens. Russell Feingold, D-Wis., and Judd Gregg, R-N.H., it did adopt an amendment by Budget ranking member Pete Domenici, R-N.M., to set a 2003 cap.

Feingold and Gregg are expected to offer the same amendment during the Senate floor debate on the budget next month; Feingold also may, with Sen. Phil Gramm, R-Texas, offer a more comprehensive budget process reform amendment to the bill to raise the debt ceiling.

Although the administration has called on Congress to send the president stand-alone legislation to raise the debt limit by $750 billion as soon as possible, Daniels later told reporters the administration "would be happy to see it done however it is done."

House GOP leaders have repeatedly said that, without Democratic support, they will move the debt limit bill on the supplemental.

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