Transcripts

Bracing for the Budget Battle

PAUL KANGAS: President Bush is gearing up for the fall classic. But it's not the Yankees and the Red Sox he's watching. September is the time when Republicans and Democrats traditionally battle over the Federal budget. As Darren Gersh reports, the president and the Democratically controlled Congress are digging in for a fight.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: With a week to go until the end of the Federal government's fiscal year, the president scolded Congress for failing to pass a single spending bill. Mr. Bush added the old Washington trick of wrapping everything into a huge year-end spending bill filled with hidden pet projects would not work this time.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If they think that by waiting until just before they leave for the year to send me a bill that is way over budget and thicker than a phone book, if they think that is going to force me to sign it, it's not. This would be bad for our country. It would be harmful for our economy and it would be unfair for the taxpayers.

GERSH: With the president eager to veto their work, Democrats have little incentive to rush out bills. Analysts say both sides are spoiling for a fight, even though their disagreement comes down to about 2 percent of so-called discretionary spending. Even so, Senate Majority Leader Harry Reid says the differences are real.

SEN. HARRY REID, MAJORITY LEADER: People are out there that are sick, want this medical research to continue. They want it to continue at the rates it has been in the past. People are concerned about the crime in the streets. People are concerned about education, their children being able to be educated. These programs are all being cut back for what? They're being cut back to give rich people these tax breaks that they don't need.

GERSH: Budget watchdog Maya Macguineas says this debate is not really about trimming spending.

MAYA MACGUINEAS, COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET: You've got a lot of different priorities. People want to spend, but they want to say hey, it's the other side that was doing the spending. Everybody wants to spend while calling themselves a fiscal conservative and it just doesn't really work that way. If you want to spend the money, you have to be willing to say, we're spending the money and figure out how you're going to pay for it.

GERSH: There is one budget deadline investors will be keeping a close eye on: the debt limit. The Treasury says the Federal government will hit its $8.96 trillion borrowing limit on October 1. Congress is now working on legislation to raise that by $850 billion. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.