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Opposition’s spending boost sets up clash with Bush

Opposition’s spending boost sets up clash with Bush
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First Published: Thu, Mar 15 2007. 12 18 PM IST
Updated: Thu, Mar 15 2007. 12 18 PM IST
BLOOMBERG
WASHINGTON: Senate Democrats announced plans for the biggest increase in domestic “discretionary” spending in at least three years, setting up a potential clash with the Bush administration, which proposed to leave those programs at current levels.
The Democrats unveiled a 2008 budget plan yesterday that would provide a 4.5 percent increase next year for education, health care and other domestic programs. Senator Robert Byrd, a West Virginia Democrat, said the $18 billion increase is needed to shore up a host of programs eroded under years of Republican budgets.
“The squeeze on domestic discretionary spending these past years has done a lot of damage to the infrastructure of our nation,” Byrd said. “It has resulted in budgetary shortfalls that are wholly irresponsible, and they must be addressed.”
The Democratic plan meets the Bush administration’s call last month for increasing defense spending by 11.4 percent and boosting homeland security funding by 3.2 percent. Democrats rejected the president’s call to pare Medicare spending by $58 billion over the next five years. Their plan instead seeks $15 billion in unspecified cuts to Medicare over that period.
Democrats said they can still match Bush’s pledge to balance the government’s books by 2012 —without raising taxes — by clamping down on offshore tax havens, closing corporate tax loopholes and improving tax collections.
Republicans mocked the plan, saying Democrats proposed a big increase in federal spending while providing only vague notions of how to pay for it.
“It’s almost like a ‘Wizard of Oz’ tax policy here,” said Senator Judd Gregg, the top Republican on the budget panel. “There’s somebody behind a curtain — we haven’t seen who it is -- but that person is supposedly going to have the answers of how we’re going to get this new revenue.”
House Budget
The Budget Committee will probably approve the plan today, sending it to the entire Senate for a vote. The House Budget Committee is slated to unveil its own plan next week.
While the president’s signature isn’t needed for the budget to take effect -- the blueprint is only an agreement among lawmakers -- Bush can veto the individual tax and spending measures that Democrats will have to pass to implement the plan.
“It is encouraging that the Senate Democratic Budget embraces the president’s goal of balance in 2012, but I am disappointed that their path to balance is paved with higher taxes, higher spending and what can only be characterized as budgetary slights of hand,” Office of Management and Budget Director Rob Portman said in a statement. “What’s even more concerning is their proposal ignores our biggest budgetary challenge - the unsustainable growth in entitlements.”
Democrats called the administration’s budget proposal inadequate, saying it fell $13 billion short of the amount needed just to maintain current domestic services.
Biggest Increases
Democrats would reserve the biggest increases for education, health care and veterans’ programs. Their plan would provide as much as $50 billion over the next five years to expand the State Children’s Health Insurance Program, which offers health insurance to children from families who don’t qualify for Medicaid yet cannot afford private insurance.
The plan would also increase spending on veterans’ programs by 18 percent to $43.1 billion while boosting Department of Education funding by 3.4 percent to $60.9 billion. That’s $6 billion more for education and $3.5 billion more for veterans than Bush requested.
“No longer will our communities have to face painful cuts in housing, no longer will our ports have gaping security holes, no longer will our schools continue to be underfunded,” said Senator Patty Murray, a Washington Democrat.
Democrats said their proposed revenue increases would enable the government to show a $132 billion surplus in 2012, the first since 2001.
Gregg Objects
“While no single budget resolution can solve all of our budget challenges, this plan will begin to put the nation back on a more sound fiscal path,” said Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat.
Gregg, the panel’s top-ranking Republican, said the plan would do little to address the long-term budget challenges posed by the looming retirement of the Baby Boom generation.
“No one can deny that this is a fiscal meltdown which we’re headed towards as a nation, where our children are going to end up paying bills they can’t afford -- unless we take action,” said Gregg. “It’s like that oil filter ad: You can pay me now or you can pay me later.”
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First Published: Thu, Mar 15 2007. 12 18 PM IST