Congress, administration gear up for final budget battle

By Brian Friel

February 8, 2008

The last time an outgoing president and an opposition Congress squared off for their final budget battle, the opening salvos looked a lot like the first shots fired this year. "It's dead on arrival," House Budget Committee Chairman John Kasich, R-Ohio, said of President Clinton's final budget proposal in February 2000.

After President Bush submitted his final budget on February 4, Democrats similarly dismissed it. Senate Budget Committee Chairman Kent Conrad, D-N.D., said that Bush's plan "will be quickly forgotten" and quipped at a press conference, "I have been asked if this is a budget that is dead on arrival. My answer would be no, it is debt on departure. Now that the president is leaving, he is leaving behind a legacy of red ink." And House Budget Committee Chairman John Spratt, D-S.C., told reporters, "This budget doesn't plot a path that we're likely to take."

Indeed, Senate Majority Leader Harry Reid, D-Nev., went a step further, predicting that Democrats could well punt the fiscal 2009 appropriations bills until Bush is out of the White House. "The president had us over a barrel last year on the appropriations bills because we did not want another continuing resolution," Reid said on the Senate floor on February 4. "But he does not have us over a barrel this year, because either Senator [Hillary Rodham] Clinton or Senator [Barack] Obama will be the president in less than a year. If we have to deal with a CR next year, we will deal with it."

But if 2000 is any guide, Bush's budget may not be as dead as it now appears. In 2000, it took three presidential vetoes, one veto override in the House, and a mind-numbing 21 continuing resolutions, but the Republican Congress ultimately approved and Clinton signed all of the spending bills before he left office -- eight of them before Election Day.

This year, Bush has proposed increasing the overall discretionary budget by 4.9 percent over fiscal 2008, from $941.4 billion to $987.6 billion. Nearly all of the $46.2 billion increase would go to national defense, homeland security, and foreign aid. Nonsecurity domestic spending, including education, health care, and transportation, would get an overall boost of only $1.3 billion, or 0.3 percent more than last year. Many departments would actually see budget cuts, including Agriculture and Transportation.

Bush's overarching message is fiscal austerity in nonsecurity programs, but Democrats charge that the $400 billion fiscal 2009 deficit that he projected, plus the more than $9 trillion national debt, undercut that message. "He is demonstrating that he is just as nonserious now as he's ever been," House Appropriations Committee Chairman David Obey, D-Wis., told National Journal. "This is a man who is without a doubt the worst president in the history of the Republic, and for him to give us lectures on budget priorities or fiscal responsibility is a joke."

Rep. Debbie Wasserman Schultz, D-Fla., chairwoman of the Legislative Branch Appropriations Subcommittee, said she wants Bush to treat Congress as an equal partner. "One of the things we have been fighting to make sure that this administration understands is that he proposes the budget and we write our own," she said. "And then we can negotiate and discuss what eventually goes in it and what comes out of it, but this is not a dictatorship."

Last year, Democrats complained that Bush was unwilling to negotiate on the appropriations bills. The congressional budget resolution set fiscal 2008 discretionary spending at $956 billion -- $23 billion more than Bush requested -- and the White House threatened to veto appropriations bills if they pushed spending higher than $933 billion. In November, after Bush vetoed the Labor, Health and Human Services, and Education measure, Democrats offered to split the difference with him by trimming $11 billion from their appropriations bills. Bush wouldn't budge, and as Christmas neared and Democratic leaders lacked the votes to override his vetoes, they moved a massive spending package that largely adhered to his limits. They also yielded to White House demands for $70 billion in Iraq war funding.

"The president won," said Maya MacGuineas, director of the fiscal policy program at the New America Foundation, a nonpartisan think tank.

Others aren't so sure. Conrad said on February 4 that he doesn't think the president won the budget battle last year, pointing to $11 billion in emergency spending that Democrats got approved on top of the $933 billion. "It was basically split the difference, in terms of what actually happened in funding," Conrad said.

Brian Riedl, a budget analyst at the conservative Heritage Foundation, said that Democrats used a variety of budgetary methods to bump spending $20 billion above Bush's top line -- and close to their initial demands. "While the Republicans played strong defense most of the year on discretionary spending, the final omnibus spending bill was closer to the Democrats' level than the president's when you count the gimmicks," Riedl said.

The final budget agreement, for example, included $3.7 billion for veterans care that was not counted against the $933 billion limit because it was listed as emergency spending. "Both sides were able to save face politically last year," Riedl said. "On the surface, the president got his discretionary spending total. But in reality, the Democrats got most of what they wanted through gimmicks."

Going forward, Spratt suggested that last year's budget fight may persuade lawmakers to keep the overall spending cap down this year. "In light of the fact that they'll have to deal with the president again, we can probably get a reasonable proposal out of the appropriators this time around," he said.

Of course, appropriators generally prefer higher caps than do budget hawks like Spratt, and this year is unlikely to be different. On January 17, even before Bush had released his spending plan, Rob Nabors, the majority staff director of the House Appropriations Committee, told reporters that whatever the president's top line turned out to be, "I don't think that's something that Chairman Obey would accept."

Even when the president succeeds in making Congress adhere to his overall cap, the appropriators have a great deal more sway over how money is spent than he does. Last year, Democrats blocked many of Bush's proposed cuts to their pet domestic programs while slashing some of his favorites, including Reading First, an education program that he and the first lady have championed. Appropriators also moved some money from the defense budget to domestic programs. And they included in the spending bills 11,737 earmarks worth $17 billion for home-state programs that the White House may not have requested. The administration is now threatening vetoes if Congress doesn't cut the number and cost of earmarks in half.

Sen. Frank Lautenberg, D-N.J., an appropriator, said after Bush's State of the Union address that he's not sure whether Republicans will stick with the president on the budget this election year. "He's going to have to work a whole lot harder for it, because there are a lot of people in that room who stood and clapped and applauded who are worried about retaining their seats," Lautenberg said. "It's one thing to face the camera. It's another thing to face the public."

Many GOP lawmakers, however, have also expressed a desire to demonstrate to their party's base voters a renewed commitment to fiscal conservatism. Sen. Judd Gregg, R-N.H., said that Republicans would rally behind presidential vetoes -- at least on the overall spending number -- in the name of fiscal discipline. "If you hit the top-line number, where you've actually maintained spending discipline and you've kept it at 1 percent below the rate of inflation or something like that, then how Congress spends the money under that number is the prerogative of the Congress," Gregg, who is both an appropriator and the Senate Budget Committee ranking member, told NJ.

In his discussion with reporters, Nabors noted a couple of factors that may help push the appropriations bills through this year, despite the potential for gridlock and suggestions that Democrats may wait until a new president is in office. For one, appropriators like to appropriate. "The appropriations mentality historically has been sort of 'gung ho, we move bills, we keep the government operating,' " he said.

Another factor is that House rules allowing more amendments and debate on appropriations bills than on other legislation mean that there's more bipartisan pressure to move appropriations bills -- and use them for waging a wide variety of policy fights. Last year, lawmakers spent 50 percent more time on the House floor on appropriations bills than in the previous year, Nabors said.

Indeed, the completion of the appropriations bills in 2007 -- a year in which not much other major legislation was enacted -- showed that lawmakers can find ways to compromise with the White House. This election year, Democrats looking to shrug off charges of "do-nothingism" could try to get the budget done to show their legislative effectiveness.

"The appropriations process still works," Nabors said. Pointing to the difficulty that other bills have in getting through the House, he added: "It might be the best process in town."

By Brian Friel

February 8, 2008