Budget Reveals Downside of Campaign Promises

WASHINGTON —  Suddenly, the choices are much clearer--and the stakes higher.

That’s the consensus in both parties after the release Monday of President Bush’s aggressive plan to sharply restrain federal spending growth next year.

As a candidate, Bush emphasized the benefits that he would dispense from the massive federal surpluses expected over the next decade--sweeping tax cuts and new spending for education, the poor and the military.

His budget forced him for the first time to detail the other side of the ledger--spending reductions in programs to hire more police, promote energy efficiency and protect the environment, among many others. In some cases, the budget whacks at programs in the very areas Bush identified as priorities, such as encouraging urban development.

Democrats immediately argued that the proposed cuts undermined Bush’s promise to govern as a “compassionate conservative” and represented the real price of his proposed $1.6-trillion tax cut, phased in over 10 years.

“It shows that there are choices--that it’s not pain-free to cut taxes as much as he wants,” insisted Steve Elmendorf, chief of staff for House Minority Leader Richard A. Gephardt (D-Mo.).

But Republicans also argue that Bush’s lean budget--which seeks to hold the growth of discretionary federal spending to 4% next fiscal year, only slightly above inflation--clarifies the choices in ways that benefit them.

Last week, the Senate--often by sweeping bipartisan majorities-- approved a budget that increased discretionary federal spending next year by almost twice as much as Bush proposed. Over the next decade, it promised at least $530 billion more than the president prefers over the next decade for education, agriculture, scientific research, prescription drugs for seniors and several other programs.

Bush allies say those votes validate the president’s contention that Washington will inevitably spend the surplus if it isn’t returned to taxpayers through tax cuts.

“There should be no question after looking at what the Senate did last week,” said John Cogan, a senior fellow at the Hoover Institution in Palo Alto, who helped write Bush’s budget. “The choice is not between tax reduction and debt reduction. The choice is between tax reduction and spending increases.”

Even if they clarified the choices, those Senate votes show how difficult it will be for Bush to impose his vision of fiscal restraint on a Congress where power is divided almost evenly between the parties.

On education alone, the Senate voted to spend about $250 billion more than Bush proposed over the next decade. And it approved doubling the $150 billion he set aside to provide prescription drugs to seniors under Medicare.

For 2002, the Senate budget anticipates growth in discretionary outlays--those apart from automatic benefit programs such as Social Security and Medicare--of about 7%. That’s nearly twice the level Bush proposed and almost as much as Congress approved in President Clinton’s final budget, a document Bush has denounced as profligate.

Those early Senate votes aren’t the final word; the House approved a budget late last month that limits discretionary spending growth to Bush’s 4%. Republican leaders hope to tilt the final House-Senate compromise back in that direction.

But the burst of spending amendments that cleared the Senate last week frames the fundamental question facing Bush’s plan: Is it possible to squeeze federal spending when Washington is at least temporarily awash in surpluses?

“There is certainly no political environment right now for cutting budgets for agencies,” says Stephen Moore, president of the Club for Growth, a conservative group.

Similarly, Sen. Kent Conrad of North Dakota, the ranking Democrat on the Budget Committee, said: “It’s hard to take [the Bush budget] seriously in light of how the Senate voted.”

As the budget moves through Congress, the pressure for spending on popular programs is likely to present Bush with a complex political dilemma. Many analysts agree with Marshall Wittmann, a senior fellow at the conservative Hudson Institute, who says that the only way Bush can hold down spending anywhere near the level he proposed Monday “will be to veto appropriations bills sent to him by a Republican Congress.”

On Sunday, Vice President Dick Cheney suggested Bush would do just that if necessary. “This president is eager to veto appropriations that come in over budget,” Cheney declared on ABC’s “This Week.”

But that could generate antagonism and cost Bush votes on his tax cut. Indeed, during last week’s Senate deliberations, the administration and Republican leaders sought to win votes for the tax cut by promising new spending to Sens. James M. Jeffords (R-Vt.) and Ben Nelson (D-Neb.), both of whom ultimately spurned Bush.

All the pressure is in the direction of shrinking the surplus--and even risking a return to deficits.

“The horse trading will always be a bigger tax cut for even more spending, so this could cause this surplus to disappear quite rapidly--even apart from the slowing of the economy, which is going to slow the collection of revenues,” Moore said.

Like most conservatives, Moore gives Bush high marks for trying to hold the line on spending growth, even if the final number appears certain to exceed his 4%. “If the president had set the lower [boundary] at 8%, the Senate would have come in at 12%,” agreed Cogan.

But Bush’s determination entailed spending reductions that open him to Democratic charges of abandoning his “compassionate conservatism.” After promising to encourage redevelopment in depressed urban areas, for instance, Bush has proposed cuts in the community development block grant program and Clinton-era programs for community development banks, empowerment zones and urban venture capital investment.

Shaped by such arguments, the spending fight is likely to follow the grooves laid down during the tax debate and the early skirmishing on the environment--with Democrats arguing that Bush is governing far more conservatively than he ran as a candidate. “If you looked through this budget, the score would be about 80 conservative versus 3 compassionate,” said Gene Sperling, the top economic advisor in the Clinton White House.

What distinguishes this fight from earlier fiscal confrontations between Republicans and Democrats is that Bush has also proposed $43 billion in spending increases in certain areas, such as education and government partnerships with religious charities that work with the poor.

Bush has also generally avoided the deep reductions--such as the proposals to eliminate Cabinet departments or slash the growth in Medicare--that helped sink the 1995 congressional GOP budget, the last major effort to seriously constrain spending. In many instances, the administration argues, the “cuts” Democrats criticize represent an effort to shift resources from programs the White House considers ineffective to programs it considers more promising.

“We are making an argument that it is possible to have an activist government that is fiscally responsible,” said one White House official, who asked to remain anonymous while discussing administration strategy. But from the first rounds, the months ahead seem just as likely to cast the two parties in familiar roles--Republican tax and budget cutters against Democratic defenders of the safety net. Those roles do more to reassure the parties’ ideological bases than to reposition the two sides in the eyes of centrist swing voters.

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Times staff writer Nick Anderson contributed to this story.