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Feb. 4, 2008 – 10:25 p.m.

Democrats Hope to Turn Budget Table

By David Clarke, CQ Staff

Even as they drew battle lines over President Bush’s $3.1 trillion budget proposal
Monday, Democrats were considering ways to avoid a major spending fight
altogether.
Some are already saying that if Bush takes the same tough budget stance in the
coming months as he did last year, they can wait him out until a new president is
elected.
“The president really had us over a barrel last year on the appropriations bills
because we did not want another continuing resolution,” Senate Majority Leader
Harry Reid said. “But he doesn’t have us over a barrel this year, because either . . .
Clinton or Obama will be the president in less than a year — and if we have to deal
with a CR [continuing resolution] next year, we’ll deal with it.” Sens. Hillary Rodham
Clinton , D-N.Y., and Barack Obama , D-Ill., face off Tuesday in multiple primaries.
Others cautioned that such a strategy has a downside for Democrats and is by no
means a certainty.
House Democratic aides said the idea of pushing off
some or most of the appropriations work until a new
president is elected continues to be discussed,
though no decisions have been made.
“The problem with that is it just puts the next
president in a hole,” said an aide who works for a
House appropriator.
Bush unveiled a budget Monday that calls for a big
boost in defense spending while taking a tough line
on a variety of domestic programs, causing
Democrats to dismiss the proposal as the last fiscal Economic Forecasts Compared
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gasp from a president with less than a year left in
office.
The proposal represents Bush’s last chance to put his imprint on the nation’s fiscal
landscape. Yet, with Democrats controlling Congress and hoping to win the
presidency in November, his plans have little chance of being enacted.
Even though it may not set off the battle that the White House budget did last year,
Bush’s proposal will serve to highlight differences between the parties on a range of
issues, including the deficit, tax cuts and the growing cost of entitlement programs.
“The president proposed pro-growth policies aligned with our long-term economic
goals,” said Senate Minority Leader Mitch McConnell , R-Ky. “The best way to ensure
lasting health for the U.S. economy is to keep taxes low and spending in check.”
Holding Down Spending
Bush’s proposal takes a particularly tough stand on domestic, non-security
discretionary spending, which is provided through the annual appropriations process,
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calling for an increase of less than 1 percent, to $393 billion, in fiscal 2009. The
proposal would then freeze spending at that level for the next four years.
That is part of Bush’s plan to balance the budget by fiscal 2012, though such a freeze
is highly unlikely regardless of which party controls Congress or the White House.
Bush requested $987.6 billion in non-emergency discretionary spending for fiscal
2009. That represents a 4.9 percent increase from the current fiscal year. More than
half of the discretionary total — $515.4 billion — would go to the Pentagon. That is a
7.5 percent increase, excluding war funding, from this year’s allocation.
The president’s budget includes a request for an additional
$75.8 billion in emergency funding, which is supposed to be
for one-time costs. Of that amount, $70 billion is targeted for
the war in Iraq and terrorism-fighting activities, with the
remainder going toward hurricane relief for the Gulf Coast.
The proposal leaves little room for funding boosts for
domestic programs favored by Democrats, such as those
dealing with the environment, health care access and
infrastructure projects.
Bush proposed cuts to the discretionary budgets of several
departments, including Health and Human Services, Justice
The Numbers: A Breakdown of and Transportation. Veterans’ programs would receive a 3.8
Bush's Fiscal 2009 Budget percent increase, to $44.8 billion, when $3.7 billion in
Click here to view the chart
emergency spending for fiscal 2008 is included.
The president also proposed eliminating or reducing funding for 151 discretionary
spending programs, for a savings of $18 billion in fiscal 2009. Congress has rejected
many of these proposed cuts in the past.
Last year, Bush was able to force Congress to adhere to his overall spending limit
because GOP lawmakers backed his threat to veto bills that would exceed his
request.
But with an election nearing, the dynamic has changed. “We are not going to be held
hostage by the unreasonableness of the White House,” said Reid, D-Nev.
“We’re not going to follow his budget,” said Tom Harkin , D-Iowa, chairman of the
Senate Labor-HHS-Education Appropriations Subcommittee. “I mean, his budget is all
screwed up.”
Projecting Larger Deficits
Bush’s plan anticipates a return to the increased deficits that marked the first half of
his presidency. The White House is projecting a deficit of $410 billion in fiscal 2008
and $407 billion in fiscal 2009. That follows three straight years of declining deficits.
The fiscal 2007 deficit was $162 billion, resulting from better-than-expected
corporate tax revenues.
Those revenues are now declining because of the economic
slowdown. The administration’s deficit projections assume
that Congress will enact an economic stimulus package this
year, which both parties have agreed not to offset, that will
cost $145 billion total in fiscal 2008 and 2009.
The deficit reached a record high, in dollar terms, of $413
billion in fiscal 2004. That translated to 3.6 percent of gross
domestic product (GDP), the best way of measuring the
deficit, according to economists. That was lower than during

The Bush Budget's Hit List

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the 1980s, when the deficit peaked at 6 percent of GDP in fiscal 1983. The projected
fiscal 2008 deficit would be 2.9 percent of GDP.
White House budget director Jim Nussle called the increase in the deficit
“manageable” and “temporary.”
Bush’s proposal projects that the budget will run a surplus of $48 billion by fiscal
2012. That assumes, however, that Congress enacts Bush’s plan to trim the growth
of Medicare and Medicaid by $195.7 billion over five years; that the wars in Iraq and
Afghanistan are not funded beyond fiscal 2009; and that the reach of the alternative
minimum tax is not curtailed after the 2008 tax year. It’s unlikely any of these
assumptions will become reality.
Republicans called for Democrats to at least consider the proposed changes to
Medicare and Medicaid as both parties agree that spending on the programs is on a
path that cannot be sustained.
Senate Budget Chairman Kent Conrad , D-N.D., and his House counterpart, John M.
Spratt Jr. , D-S.C., used the budget submission to criticize the president’s overall
fiscal record.
“When President Bush took office, the national debt stood at $5.7 trillion; today it is
$9.2 trillion and rising,” Spratt said. “This is the legacy our children and
grandchildren will inherit.” Spratt and Conrad will face scrutiny next month when
they unveil their fiscal 2009 budget blueprints.
One flashpoint is sure to be how to account for the expiration of the 2001 and 2003
tax cuts (PL 107-16, PL 108-27). The president’s budget plan assumes they will be
extended beyond 2010, when most of the tax cuts expire, at a cost of $635.1 billion
over five years and $2.1 trillion over 10 years. The fiscal 2008 budget resolution (S
Con Res 21) adopted by Congress last year assumed that most of the tax cuts either
expired or were fully offset if extended.
Kathleen Hunter and Liriel Higa contributed to this story