| Federal cuts designed to trim the 'fat' 04/10/2001 By Robert Dodge / The Dallas Morning News
WASHINGTON – Calling for a leaner federal government, President Bush sent Congress on Monday the fine print of his fiscal 2002 budget, spelling out cuts in a wide variety of federal programs.
The budget, which fills in details of a summary released in February, also contains spending increases to fulfill promises that Mr. Bush made during his presidential campaign. But analysts said it would energize interest groups and lawmakers who oppose cuts in areas ranging from police enforcement to government research.
"Washington is known for its pork," Mr. Bush said before opening a Cabinet meeting at the White House. "This budget funds our needs without the fat."
The proposed cuts are designed to hold the line on spending and help make room for the president's $1.6 trillion tax-cut package. The budget also would fund Mr. Bush's spending priorities for education, defense and health care and pay down about $2 trillion in debt over the next decade.
Among the programs targeted for cuts are initiatives advanced by former President Bill Clinton.
Democrats accused the White House of undermining essential programs to finance tax cuts. And they said Mr. Bush's plan is so dependent on unrealized projected surpluses, it provides little cushion so that a recession could easily plunge the government back into deficit spending.
"Any kind of significant downturn in the economy that affects revenues or spending is going to put you back in the red again," said Rep. John Spratt of South Carolina, the ranking Democrat on the House Budget Committee.
Overall, the budget calls for cuts at 10 of the federal government's major agencies, with the biggest targeted for the Agriculture and Transportation departments.
Trimming down
The White House said annual discretionary spending increases are being held to 4 percent.
But the Center on Budget and Policy Priorities, a liberal research group, said domestic programs would be shortchanged under Mr. Bush's proposal, while larger spending increases are slated for defense, international affairs and a new reserve fund for natural disasters. The center said domestic programs would be held to just 0.4 percent growth, less than the rate of inflation and $12 billion below what the Congressional Budget Office said is needed to maintain current services.
Mitchell Daniels, the president's budget director, disagreed with the analysis and said that in many cases funds are being redirected to meet new priorities.
For instance, the president's budget calls for a 14 percent cut in Mr. Clinton's Community Oriented Policing Services (COPS) program, which proposed putting 100,000 new police officers on the streets. That is part of a $1 billion Justice Department cut that would help pay for $2 billion in other priorities, including prison construction, immigration control and increased gun prosecutions.
Mr. Daniels also noted that salaries of officers in the COPS program would be funded by local governments after they have been on the job for three years.
The Bush budget also would cut so-called corporate welfare, including programs to encourage shipbuilding and energy conservation at corporations and subsidies for exports. Clinton administration initiatives to be trimmed include programs to support doctor training at children's hospitals; tax credits for economic development in distressed neighborhoods and initiatives to limit nuclear proliferation.
For instance, the Energy Department plans to cut core solar and renewable energy programs in half, to $186 million. And energy efficiency research programs would be cut by $61 million.
"The taxpayers sent us here to weed out the waste and to address growing problems of energy supply," said Energy Secretary Spencer Abraham.
Conservative approach
Similarly, Health and Human Services Secretary Tommy Thompson said the agency's budget could not grow at the 15 percent pace of last year. "The American people...don't expect annual budgets to be growing by double digits," he said.
Mr. Bush said his budget "represents compassionate conservatism" by providing increases for his spending priorities.
The president pointed to a $1 billion increase in Pell grants for low-income students. He also noted his budget would help children whose parents are in prison with a $67 million mentoring program and would fight crime with an $87 million increase for prosecutors.
Mr. Bush's budget, which seeks to fund his campaign promises, provides the biggest Cabinet-agency increase, about 12 percent, to education. The president also would increase defense spending 4.8 percent to $310.5 billion. Similarly, federal health support would rise 5.4 percent to $41 billion.
The White House budget proposal also contains a handful of new tax cut proposals.
The president revised the estimated cost of the tax-cut proposals first offered during his political campaign to $1.49 trillion over 10 years. That left room to add an additional $134 billion in tax breaks, including a maximum $2,000 tax credit for uninsured workers to purchase private health insurance.
The president called for making permanent medical savings accounts and a tax credit for cleaning up industrial sites.
New tax cut proposals also included a 15 percent credit for home solar water heaters or electric systems, a $400 credit for teachers' out-of-pocket expenses and a three-year extension on a tax credit for electricity generated from wind or farm and forest products.
Mr. Daniels, the budget director, indicated the White House intends to eliminate as many pork barrel items added by individual lawmakers as possible. And he indicated that other programs would come under review for future cuts.
Some have wide support. For instance, the latest budget eliminates $8 billion for 6,454 items, including 397 for environmental protection.
And Mr. Daniels noted that special-education programs would come under scrutiny next year even though the president proposed a $1 billion increase for 2002. "It would be a good idea to look at reform of the program at the same time we discuss what the long-term federal investment ought to be," he said.
Senate influence
Analysts said that Mr. Bush's detailed budget may already be politically irrelevant. The Senate last Friday approved a budget blueprint that reduced the president's tax cuts and increased spending, actions that analysts said moved the debate beyond the president's original budget proposals.
"It is too late for its own funeral," said Robert Bixby, executive director of the Concord Coalition, a balanced budget group in Washington.
The Senate and House must resolve differences in their proposed budgets before approving a final version. While the House budget is consistent with the president's proposals, the Senate reduced the tax cuts to $1.2 trillion and evenly divided the $400 billion difference between new spending and debt reduction.
And while the Senate cut the overall size of the tax cuts, it said $85 billion should be made available this year.
Mr. Bixby, the budget analyst, said he is worried by the Senate budget. He said lawmakers could end up tapping the Social Security surplus to provide for next year's tax cuts and spending initiatives.
Reaching an agreement
The Congressional Budget Office forecasts that if the economy worsens and there is a full-fledged recession this year, the projected $142 billion surplus could shrink by $65 billion. Adding $130 billion for tax cuts and new spending would require taking about $33 billion from Social Security.
"Looking at the short term, they may not have all the surplus they are talking about," Mr. Bixby said.
Mr. Daniels indicated that the spending could be cut closer to the president's proposals when Senate and House negotiators meet to iron out the differences in their budgets. He called the Senate's additions "sort of a boys-will-be-boys notion" in which lawmakers offered amendments to increase spending to appeal to constituencies, knowing the items will be removed later.
But budget analysts said they viewed the outcome of the Senate's budget deliberations more seriously. They said the House and Mr. Bush will have to bend closer to the Senate's tax and spending figures if they want to be successful.
"This could be much harder than people think," said Robert Reischauer, president of the Urban Institute, a Washington think thank.
Staff writers Mara Gottfried, G. Robert Hillman, David Jackson, Christopher Lee and Michelle Mittelstadt contributed to this report.
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