As new fiscal year starts, government is open--barely

Congressional appropriators and the Bush administration usher in the start of fiscal 2002 today without having completed a single FY02 spending bill--and with just 15 days until the continuing resolution, which keeps the federal government funded and open for business, runs out.

Late Friday, appropriators and Office of Management and Budget officials were near a final FY02 budget deal after agreement on an overall spending total of $686 billion, an increase from the FY02 budget resolution limit of $661 billion.

Included in the final agreement is another $4 billion for education reform and $2.2 billion in emergency disaster-relief money.

With the added money, appropriators say they can wrap up the regular FY02 spending bills--many of which may carry supplemental funds made available last month to respond to the terrorist strikes on New York and Washington.

Of the $40 billion in emergency money provided by supplemental, $20 billion must be appropriated as part of the regular FY02 legislative process.

Even as appropriators and the White House were agreeing to hike the spending limit for the fiscal year that starts today, the Congressional Budget Office again slashed its budget surplus estimate--from its early September projection of $153 billion to $121 billion--for the fiscal year that just ended.

With the economy still slack and billions in unanticipated new spending now in the pipeline to respond to the Sept. 11 terrorist attacks, the fiscal outlook for FY02 is growing increasingly worrisome to conservatives at both ends of Pennsylvania Avenue. They now fear a return to the era of deficit spending.

Nevertheless, more spending--as well as temporary tax cuts-- could soon be enacted as part of an economic stimulus package being contemplated by the administration and the congressional budget and tax-writing committees.