Deficit Sparks Family Feud Among House Republicans

For Immediate Release:

March 13, 2004

Contact:Mary Curtius

Los Angeles Times

A revolt by party members worried about record deficits has delayed for at least a week the Republican leadership's plan to produce a House budget for fiscal 2005 to marry with the budget passed early Friday morning by the Senate.

Republicans are feuding among themselves about budget policy, with some arguing for stringent spending caps so taxes can be cut further and others opposing any more tax cuts. But the two groups joined forces Thursday to threaten to vote against the proposal drafted by House Budget Committee Chairman Jim Nussle (R-Iowa) unless a separate bill enforcing spending caps comes to the floor at the same time.

Nussle bowed to the pressure, pushing to next week a scheduled committee session to draft a budget.

The dust-up underscored growing unease over what is seen as an election-year liability: a deficit the Congressional Budget Office predicts will be a record $477 billion this year. The angst among Republicans over the red ink makes it increasingly unlikely there will be any new tax cuts this year, or that President Bush will see all the tax cuts enacted in 2001 and 2003 made permanent.

The budget passed by the Senate would extend previously enacted tax cuts worth $81 billion over five years that are due to expire by year's end, but that is $100 billion less than Bush had sought. The budget proposed by the House would come closer to the president's request -- at $138 billion in tax cuts over the next five years. Democrats have called that excessive.

Congressional budgets, although nonbinding, set broad guidelines for revenue and spending for the coming year.

Democrats were delighted by the dissension among Republicans over deficits and what to do about them.

"House Republicans are trapped in a budget box of their own creation and have no one to blame but themselves," House Democratic Whip Steny H. Hoyer of Maryland said in a statement Friday. "They are absolutely riven with internal conflict. Their intraparty squabbling burst into the open this week when the Budget Committee's markup of the budget resolution was stopped in its tracks."

Some budget watchdogs said they were unimpressed by congressional hand-wringing over deficits this year.

"The dynamic of it is that nobody likes deficits -- and nobody wants to do anything about them, because they involve things like raising taxes or cutting spending," said Robert Bixby, executive director of the Concord Coalition, an independent watchdog group. "So you have these phony debates where people pretend they can do things they can't, like cut the deficit in half over five years without raising taxes or cutting spending on anything anybody really cares about."

If there is cause for optimism, Bixby said, it is that "there are signs that slowly, the political consensus is beginning to shift again in favor of lower deficits."

Senate Republicans defeated a blizzard of Democratic amendments before passing their $2.36-trillion budget early Friday. The Democrats had sought increases in spending for homeland security and a variety of domestic programs.

The 51-45 vote for final passage went mostly along party lines, with California Democrats Dianne Feinstein and Barbara Boxer voting no.

The Senate budget gives Bush the 7% increase in military spending and the 15% increase in homeland security spending he had called for. Outside of homeland security, it largely holds domestic spending for items other than federal benefit programs to last year's levels.

It calls for cutting the deficit in half in three years -- two years sooner than Bush's goal. The House version would cut the deficit in half in four years. All three versions would eat away at the deficit not by cutting spending but by assuming that the economy would continue to grow stronger and generate more tax revenue.

Democrats, joined by four Republicans who crossed party lines, won inclusion of an amendment that would reimpose Senate pay-as-you-go rules used to reduce deficits in the 1990s. The rules require a 60-vote majority of the 100-member Senate to pass tax cuts and spending increases that are not offset by other deficit-reducing measures.

The amendment is not expected to survive negotiations with the House, because many House Republicans fear it would make it hard either to pass new tax cuts or extend existing ones due to expire.

But on the House side, deficit hawks are insisting on some sort of enforcement legislation -- even if it applies only to spending caps and not to revenue cuts. They said they issued their threat to vote against the budget after Nussle, under pressure from military advocates, agreed Wednesday night to restore $2 billion in defense cuts his draft budget had included.

"That, in some respects, gave us resolve," said Rep. Gil Gutknecht, a Minnesota Republican who joined in Thursday's confrontation with Nussle. "We figured that if you get rolled by defense, then it will be transportation, then veterans ... and as they say, pretty soon, you're talking real money."

The White House, Gutknecht said, is not happy about spending caps or anything that would make it harder to enact new tax cuts.

"But in the end, the White House will probably say, 'That was a pretty good idea,' " Gutknecht predicted. "This will be a message of hope to the folks who want to vote Republican ... that Republicans do stand for fiscal responsibility."

At the White House, Press Secretary Scott McClellan did not comment directly on the fight among congressional Republicans. Instead, he said, "We appreciate the Senate passing a budget that stays within the framework the president outlined for meeting our priorities, such as the war on terrorism and strengthening our economy, and holding the line on spending elsewhere."