OMB chief doesn't rule out domestic spending freeze

Office of Management and Budget Director Joshua Bolten did not rule out an outright freeze on non-defense, non-homeland security fiscal 2005 discretionary spending during a meeting Wednesday with about 50 conservative House Republicans. But he held firm that President Bush's budget would hold the line on spending and reduce the deficit, according to members attending the briefing.

Rep. Mike Pence, R-Ind., said he and others urged the administration through Bolten to "take a hard look at our push for a freeze" on discretionary spending other than for defense and homeland security programs at fiscal 2004 levels, rather than the 0.5 percent increase President Bush's fiscal 2005 budget proposes. Bolten said spending could "come in at the president's level or less. Lower would be OK," according to Pence.

House GOP leaders are prepared to back the conservatives' demands that spending be frozen at 2004 levels, although appropriators may seek to shift some defense increases toward domestic programs.

As Republican leaders try to rally support for spending discipline, an outright freeze would be more palatable "from a public perception standpoint" than a 0.5 percent increase, said a spokesman for House Speaker Dennis Hastert, R-Ill.

Sen. Trent Lott, R-Miss., said sentiment among GOP conservatives in that chamber was also growing for a spending freeze. "Symbolically it would be important," Lott said.

Members at the meeting urged Bolten to recommend that the president veto appropriations bills with spending they deem wasteful, which Bush has not yet done. House Republican Policy Committee Chairman Christopher Cox of California was circulating a letter among his colleagues Wednesday to be sent to Bush as soon as he has 145 signatures -- enough to sustain a veto in the House.

"To help you control spending during the remainder of the 108th Congress, we will vote to sustain any veto you exercise on the basis that the legislation you veto would result in unnecessary spending," states the one-sentence letter.

Members also discussed with Bolten a budget process reform proposal being drafted by Cox and GOP Reps. Jeb Hensarling of Texas, Paul Ryan of Wisconsin and Chris Chocola of Indiana that they plan to introduce next week.

"Thanks to Mr. Bolten lending us his ear, our budget initiative may finally get the rest of Congress listening," Chocola said. Among other provisions, their bill would require a binding joint budget resolution that triggers automatic spending cuts if caps are exceeded.

Also discussed was the skyrocketing cost of the new Medicare prescription drug entitlement which Health and Human Services actuaries now estimate at $534 billion over 10 years, versus a CBO estimate of $400 billion.

"I told [Bolten] that the new Medicare numbers could not have been more shocking if Justin Timberlake unveiled them," Chocola said, referring to the singer's infamous Super Bowl halftime show performance.

Meanwhile, a group of Senate moderates led by Sens. John Breaux, D-La., and Olympia Snowe, R-Maine, met Wednesday with Comptroller General David Walker to discuss the long-term effects of the budget deficit, pegged at $521 billion in fiscal 2004 by OMB.

Snowe said after the meeting that moderates would be formulating alternative budget proposals that may include revisiting Bush's call to make tax cuts permanent. She noted her support for a "trigger" mechanism in 2001 that would have canceled tax cuts if the then-healthy surplus was depleted.

Sen. Ben Nelson, D-Neb., who also attended the meeting, said Congress should look at defense and homeland security spending for savings as well, although Bush proposed large increases for those functions.

Senate Minority Leader Tom Daschle, D-S.D., and House Minority Leader Nancy Pelosi, D-Calif., Wednesday highlighted what they view as several problems with President Bush's fiscal 2005 budget proposal and said Democrats were preparing several alternatives to the administration's policies.

Among the shortfalls in Bush's budget that they might address include the elimination of 38 education programs, an 80 percent cut in funding for the COPS program, and a $725 million reduction in First Responder grants, among others.

House Budget ranking member John Spratt, D-S.C., is leading the initiative in the House to offer a comprehensive Democratic alternative to the budget with the "full force of the leadership," according to Pelosi.

However, "it is not [Senate Democrats'] intention to offer a comprehensive alternative," said Daschle, who added that they were instead preparing "a series of amendments" to the fiscal 2005 budget resolution. A spokeswoman for Daschle said later that the content of the amendments were still being debated among Democrats and could offer no specifics.

Meanwhile, Veterans Affairs Secretary Principi made a rare admission by saying he had requested $1.2 billion more for his department than Bush recommended in his budget. Principi made the comment while responding to a question from House Veterans Affairs ranking member Lane Evans, D-Ill. Bush's budget proposes $65.3 billion for VA, with discretionary spending increasing by less than $600 million to $29.7 billion.

"I commend the secretary for his candid response today, but the difference between VA's request to the White House and the administration's budget request is just the tip of the iceberg of what the veterans' healthcare system's true need is," said Evans.

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