Congressional GOP budgets: Tighter curbs on spending, smaller tax cuts
WASHINGTON (AP) — The budgets Republicans plan to start pushing through Congress will cut the federal deficit in half faster than President Bush’s five-year plan, lawmakers and aides said Tuesday.
The House and Senate election-year fiscal blueprints will also propose tighter curbs on spending, including for defense, and smaller tax cuts than the president wants.
In another departure, the Senate package will assume it will cost $30 billion to keep U.S. troops in Iraq next year. The House budget will include up to $50 billion in war expenses.
The $2.4 trillion budget for 2005 that Bush unveiled last month proposed a healthy defense increase but lacked any funds for American activities in Iraq. Administration officials said such costs were unpredictable, but said they would request up to $50 billion for Iraq operations after this fall’s elections.
“For good budgeting purposes … we have to demonstrate we know that’s coming,” said House Budget Committee Chairman Jim Nussle, R-Iowa.
The emerging congressional proposals underscore a belief by many Republicans that Bush’s budget moved too weakly against spending and soaring red ink and could be vulnerable to Democratic criticism that it lacked credibility.
Both plans — especially in the more moderate Senate — could face problems when they reach the full House and Senate, where Democrats could be joined by moderate Republicans wary of proposed spending cuts.
Details of the two plans were described by Nussle, Senate Budget Committee Chairman Don Nickles, R-Okla., and congressional aides speaking on condition of anonymity. Nickles plans to push his plan through his committee on Thursday, while Nussle will give his proposal to his committee next week.
Nickles’ plan will cut this year’s deficit in half in three years, said a Senate GOP aide speaking on condition of anonymity. Nussle said his budget will “come close to, if not fully cutting the deficit in half” in four years, going “further and faster than the president.”
The nonpartisan Congressional Budget Office projects this year’s deficit will hit $478 billion, easily exceeding last year’s $374 billion, a record in dollar terms. Using differing assumptions about how the economy will behave, Bush has estimated that this year’s shortfall will be $521 billion.
The Senate package will propose $814 billion for the one-third of the budget that covers defense, domestic security and most domestic programs, excluding automatically paid benefits like Social Security.
Bush has proposed spending $823 billion for these programs. For savings, the Senate package would cut $7 billion from Bush’s defense proposal of $421 billion, and $2 billion from remaining domestic programs.
Nussle said he would propose holding non-defense, non-domestic security spending to the same as this year’s total, just below what Bush has proposed. Nussle wants to ban “earmarks” — money aimed at specific hometown projects — but such an action has little chance of congressional approval.
Nussle also wants to hold Congress’ own $3 billion budget to the same level as this year. He said he will propose cutting about 0.5 percent from Bush’s defense and domestic security requests.
The Senate and House plans will also propose modest savings from benefit programs.
Nickles is expected to target Medicaid, customs fees and earned income tax credits for poor working families. Nussle said he will pressure House committees to find savings by eliminating waste, fraud and abuse — an oft-repeated goal that rarely produces results in Congress.
Bush has proposed $1.3 trillion in tax cuts over the coming decade, of which $1.1 trillion is to make permanent tax reductions enacted in 2001 and 2003. Wary of the impact on long-range deficits, congressional Republicans will pursue few tax cuts this year.
The Senate plan will assume $144 billion in tax cuts over five years, aides said. Of that, $80 billion would be given procedural protection if needed from filibusters, or Senate delays, that take 60 votes to overcome.
This will cover popular proposals to keep the children’s tax credit, tax breaks for married couples and the expanded 10 percent tax bracket from shrinking, as current law otherwise will require. It also will call for moving up the abolition of the estate tax by one year, to 2009.
Nussle said his budget will call for protecting the children’s credit, the 10 percent bracket and taxes on couples.