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Congress Debates President Bush’s Budget Proposal For A Second Straight Day

Congress opened hearings Tuesday on President Bush's $2.57 trillion budget proposal. Analysts discuss the plan, which faces opposition from many Democrats and even some Republicans, and its prospects for passing in the House and Senate.

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  • MARGARET WARNER:

    For a closer look at the political dynamics that will affect the president's budget, we turn to two longtime observers of Congress and the budget process: Stan Collender, a former Hill staffer, now managing director of Financial Dynamics, a business communications consulting firm; and Norm Ornstein, resident fellow at the American Enterprise Institute.

  • MARGARET WARNER:

    Well, we just saw Josh Bolten and John Snow getting a work over. Norm, what are the prospects in the big picture for this budget on Capitol Hill?

  • NORM ORNSTEIN:

    Well, unlike so many others in the last 20 years, Margaret, this one is not being declared dead on a rival. It has been a fairly typical pattern. But it is going to face some rough sledding both in the overall numbers, I think, but in particular on the specifics. Josh Bolten himself said he is not going to get everything they wanted but they are going to have a hard time getting a majority of what they want, particularly when it comes to these program cuts.

  • MARGARET WARNER:

    How do you see it?

  • STAN COLLENDER:

    Well, Norm is being a little kind. There have even been several Republican members in the House and senate that declared the president's budget dead on arrival. That's a phrase we haven't heard since Bill Clinton was sending budgets to Republican majorities, so this is pretty significant. This is going to be the toughest budget the president has to push through Congress.

  • MARGARET WARNER:

    Now, what does the president have going for him?

  • STAN COLLENDER:

    Well, first of all, he has just been reelected; he's got larger Republican majorities. He is still relatively popular even though his job approval ratings have taken a beating in recent days. We've got the Iraqi elections that just went off without much of a hitch. You know, so in a lot of ways he has got a lot of things going for him. The problem he is going to have though is that he is a lame duck. He is not running for reelection whereas a lot of members of both the House and Senate will be up for reelection in two years.

  • MARGARET WARNER:

    How do you assess the president's political capital on the Hill or more specifically how do members of Congress assess his political capital?

  • NORM ORNSTEIN:

    It hasn't been nearly as great as he hoped or expected right after the election when he said I've won a lot of political capital, earned it, and I'm going to spend it. But he has gotten good news in the last couple of days. After the Iraqi election, and the state of the union message, his approval rating is up to 57 percent in the latest Gallup Poll. That's better than the 50 where it has been. But let's face it, members of Congress, especially those Republicans know that they are up in 2006 and he is not. And they're not likely to want to go back.

    They don't see him as being so popular and so much with the mantle of fiscal responsibility around him that they can justify cuts in vocational education or in the Centers for Disease Control or in veterans' health care. So, you are going to find that even as many Republicans say good things about the president, they are going to be fighting these specifics.

  • MARGARET WARNER:

    Before we get to all the specific programs, let me ask you about one other thing, Stan Collender. The basic tradeoff, which we heard Josh Bolten express again, as far as the president is concerned this is a wartime budget and in wartime, defense and homeland security, they get the increases and basically all the domestic programs take a hit. Is there a consensus on Capitol Hill, at least about that basic tradeoff when it comes to cuts?

  • STAN COLLENDER:

    Well, there is in general, but when you start getting to some of the specifics that we are going to talk about, that decision becomes a lot more difficult. Everyone is in favor of cutting the budget except when it becomes something that's important to their constituency, their state, their district. And in this case after a year of a tight budget, last year doing it two years in a row, doing it will be very hard for most members.

  • MARGARET WARNER:

    Do you think, Norm Ornstein, though that they will — that members of Congress will look to defense and homeland security to take cuts or are those sacrosanct given the situation?

  • NORM ORNSTEIN:

    Actually what is going to be interesting here is that the homeland security budget only gets a 3 percent increase but in some areas, like firefighters, first responders, it doesn't. You are getting criticism now in many respects that we haven't done enough in homeland security. On defense, while we have a sharp increase, we also have serious cuts in weapons systems. And those are things that members of Congress take very seriously.

  • MARGARET WARNER:

    If the weapons are built in their district.

  • NORM ORNSTEIN:

    And of course, most of them are built in three hundred or four hundred districts around the country. So we are not going to see, I think a lot of tradeoff between defense and homeland security on the one hand and domestic programs on the other. There is going to be a lot of pressure to increase all of those and, to some degree, it is going to be a question of whether Democrats can bring into this the tax cuts, as we saw John Spratt try to do and make that part of the tradeoff. They have been unsuccessful so far.

  • MARGARET WARNER:

    But they're talking about wanting to roll back part of the president's first term tax cuts. Is there any prospect for that?

  • STAN COLLENDER:

    Almost certainly not. The president would veto it even if it got to him. I doubt it would get through a Republican majority in both Houses. So that's not really an option. There are some small revenue increases in the president's budget but not enough to make much of a difference. But let me just add one more thing. The last two times the deficit started to be an issue in this country, defense did take a hit, both in the '80s with Gramm-Rudman and in the '90s after Ross Perot put the issue on the table. So let's not be too surprised if defense, non-Iraqi-related defense starts to be looked at pretty seriously.

  • NORM ORNSTEIN:

    You know, one area here, Margaret, that is striking is a sharp increase in diplomacy and foreign aid. You know, this is George Bush taking Ronald Reagan's legacy of reaching out to the rest of the world. That has not been real popular with members of Congress — that he is willing to take on this mantle and given the wartime atmosphere, suggests it may not be the kind of whipping boy in Congress though that it has been in the past.

  • MARGARET WARNER:

    I already heard at least one Republican member saying yesterday it is going to be hard to sell increases at home when I'm cutting their programs. All right. I'm going to give you each a chance to choose at least one program that you think is going to see a huge battle. Stan Collender?

  • STAN COLLENDER:

    Oh, easily veterans.

  • MARGARET WARNER:

    Veterans health care.

  • STAN COLLENDER:

    Veterans health care; all veterans programs in general but veterans health care in particular. Look at the emotional part of this; that is, veterans returning from Iraq, veterans returning from Afghanistan and the president at the same time saying he wants to salute the heroes, but somehow make it a little bit more expensive for them to get health care. That will be a huge battle fought out in every district across the country. It will be very emotional and very difficult for the president to win that one.

  • MARGARET WARNER:

    What do you nominate?

  • NORM ORNSTEIN:

    Agricultural subsidies. This is fascinating. George Bush has proposed whacking away at agricultural subsidies but particularly hitting the more wealthy farmers. Chuck Schumer and other liberal Democrats from urban areas have praised this particular effort. It is going to get some opposition from conservative farm state Republicans like Sen. Saxby Chambliss of Georgia and probably even from some rural Democrats. We are going to see very funny coalitions there. That's a very tough one to work with.

  • MARGARET WARNER:

    Now what about the Medicaid cutbacks? That's a big ticket item. Briefly describe what the president wants to do and how much of a fight do you think that will be?

  • STAN COLLENDER:

    Well, basically, without going into too much of the details, he wants to push more of the responsibility of the program on to the states and cut the budget by maybe 30 percent, nothing special. The problem that the president is going to have here is, one, the states are not in great fiscal condition. Second, there are more Republican governors than there are Democratic governors and they're already screaming about this. It will be very interesting to see if former Bush budget director, for example, Mitch Daniels, who's now Indiana governor, see where he comes, or Arnold Schwarzenegger where he comes off on a program like this.

  • MARGARET WARNER:

    Do you have one more nominee?

  • NORM ORNSTEIN:

    Well, I would actually underscore the Medicaid issue because states before this budget were screaming that they couldn't even begin to handle their Medicaid responsibilities. And now you've got a big hit on them. All of these Republican governors are going to join with their members of Congress and this is going to be a major, major battle. But you take that and also these homeland security areas where I think you are going to find another strange coalition — Republicans, like Chris Cox, chairman of the Homeland Security Committee joining were Democrats saying there is not enough in here for homeland security — it is going to be funny coalitions and very different battles then we've seen in the past given the priorities the president set out here.

  • MARGARET WARNER:

    Stan Collender, assess the political climate a little more among the Republicans. Now, the president said one reason he came up with this budget, which is the first one to really cut in real terms domestic programs, is that members of his party on Capitol Hill were screaming about federal spending. How much is the leadership with them on this and how much are members with him on this at least philosophically?

  • STAN COLLENDER:

    Well, philosophically I think everybody says, yes, let's cut the budget. But what you are seeing is something we started talking about, which is a lot of members looking in to the president and saying, you know, you are not running for reelection; your legacy is less important to me than my reelection efforts. And if this is what you are going to do right now, if this is where you are going to make it difficult for me to talk to my constituents, then you know what? I've got to look out for myself more than I've got to look out for you.

    This is going to be damaging not just in the budget fight this year but if the president pursues some of his big agenda items, my guess is his effort on Social Security has been hurt pretty badly by the budget he submitted yesterday.

  • MARGARET WARNER:

    Do you agree with that?

  • NORM ORNSTEIN:

    Oh, I definitely do, and the leaders in Congress have not been exactly enthusiastic about this budget. But what we are seeing in part is conservative Republicans who were very unhappy with the Medicare prescription drug bill when it went through last year. And now we are finding that the administration estimates that it's double the cost in the first five years of what they said, saying we have had more spending under George Bush than we had under any president except Lyndon Johnson. Let's get serious about this.

    Now he is saying all right, I'm calling your bluff. And we are going to see whether the leaders will go along, but also whether the president will be tempted to veto bills, something he did not do with a single bill in his first term, and make Congress the scapegoat and portray himself as the fiscal conservative instead of them. But that, as Stan suggests, has collateral damage and a whole lot of other priorities that he has with this approach he uses.

  • MARGARET WARNER:

    And the Democrats, what is their strategy?

  • STAN COLLENDER:

    Well, if they were to ask me, and they haven't, I would say at the moment, sit back and let the Republicans argue among themselves, let these fissures– let these cracks widen and let the White House try to expend as much energy as they possibly can, keeping the Republicans together. It is going to be difficult for the White House to do that. In the meantime, the Democrats don't have to put their own proposal out there to be shot down.

  • MARGARET WARNER:

    One thing that struck me, Stan Collender, is that, you know, this budget, even out to ten years, does not ever talk about eliminating the deficit. Is it harder to get Republicans and Democrats to walk the plank of cuts when the goal wasn't what it was, say, remember the Republican Gingrich Congress which was we are going to finally balance the budget, but sort of well, we're going to cut it in half maybe —

  • STAN COLLENDER:

    Well, the Gingrich/Dick Armey years was the Contract with America, they were going to require the president to submit balanced budgets, Congress to pass them. It's one of the problems Republicans are having that Norm is referring to. You've got some who are horrified by these big deficits, others who say the deficit is not important– it's tax cuts; others who say the spending cuts haven't gone far enough and others say, you know, they've gone too far. And you're exactly right but they're not talking about ten-year forecasts because they've only done five. And the way I read the numbers, we're talking about $400 billion deficits through the end of the decade.

  • MARGARET WARNER:

    What do you think that does to the sort of zealousness with which anyone will approach —

  • NORM ORNSTEIN:

    There is not much zealousness there. One of the more interesting issues here though is that the chairman of the two Senate and House Budget Committees have said that they intend to take a close look at the entitlement programs; those are almost two-thirds of the budget. Most of the president's focus is on the one sixth of the budget that's discretionary domestic spending. There is some in Medicaid in the farm programs. But until you hit Medicare and Social Security, and other big entitlements, you can't seriously cut spending. And without a public demanding that you deal with deficits in this fashion, and while we are talking about a goal of cutting them by half, it's not in real terms. It's in proportions and we haven't even considered all these supplemental budgets that are going to come forward. You are not going to get much action where it really matters. I think we are not going to see seriousness on this until we see a direct immediate economic impact.

  • MARGARET WARNER:

    Gentlemen, thank you.

  • NORM ORNSTEIN:

    Thanks Margaret

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