2006 Budget:
President Bush's budget proposal for 2006 is the closest thing in decades to a genuinely conservative spending plan. Congressional Republicans are keeping their powder dry so far, but fights loom over budget cuts. Meanwhile, Democrats have not hesitated to decry the budget's austerity.
1) The budget makes modest cuts in non-security-related domestic discretionary spending by eliminating or shrinking several social service, environmental, educational and agricultural programs. For the first time, this budget signals the Bush Administration's willingness to actually decrease such spending rather than simply limit its growth.
2) However, many of the cuts really reflect the unsustainable level of spending increases to certain programs in Bush's first term. In some cases, programs that have received huge increases-including veterans' health spending, for example-are simply being scaled back.
3) The administration is not likely to get most of its cuts, but the reduced budget gives it a stronger negotiating position. On the other hand, even budget-cutting rhetoric will not come without a political price. No sooner had the budget been released than Democrats decried it as a savage attack on society's most vulnerable.
4) Many of the programs on the chopping block, particularly the agricultural subsidies and environmental programs, have powerful constituencies who will fight the proposed cuts. The budget also increases the state burden for Medicaid funding-a principal burden for governors now. Meanwhile, military spending will increase and take a greater percentage of the overall budget.
5) On the other hand, some Democrats-particularly Senate Budget Committee ranking member Kent Conrad (D.-N.D.)-complained that the budget actually increases spending too much. He and others decried the fact that the Iraq War's costs are not included in the budget, nor are the immediate costs of funding private accounts in Social Security. Also not included is a proposed fix for the Alternative Minimum Tax-which, left alone, will soon begin to ensnare middle-income earners.
6) Republican congressional appropriators are cooperating with Bush at this point, despite the possibility that they would lose some influence under a tighter budget. Rep. Jerry Lewis (R-Calif.), the newly selected chairman of the House Appropriations Committee, issued a gushing statement on Bush's leadership in presenting the budget, but his willingness to champion spending cuts is yet to be determined.
7) The House could well pass a budget that sticks to Bush's overall numbers, if not his specific funding priorities. The bigger battle will take place in the Senate. In Bush's favor, only 51 votes are needed there to pass the budget and erect a 60-vote barrier to overspending during the appropriations process. Against him is the fact that moderate Republican senators are already preparing to oppose some of the spending cuts-particularly the proposed Medicaid reductions.
8) Importantly, the President's budget includes lease revenues from oil drilling in Alaska's Arctic National Wildlife Refuge (ANWR). If the budget passes this spring with the ANWR money on the books, Congress can return later in the year and pass a budget reconciliation bill-immune from the Senate filibuster-to allow drilling.
