Bush offers an austere '02 budget

Schools and military benefit

Justice, EPA, Energy agencies cut

Md. projects could suffer

Blueprint would cut spending growth but exceed inflation rate

March 01, 2001|By Paul West | Paul West,SUN NATIONAL STAFF

WASHINGTON - The Bush administration unveiled a tightfisted 2002 budget yesterday that calls for spending cuts in 10 major agencies, including the Justice, Energy and Interior departments and the Environmental Protection Agency.

The austere spending plan is needed, White House officials said, to counter what they described as a lack of fiscal discipline by Republicans and Democrats in Congress during the final years of the Clinton administration.

"They were growing that budget just like a bidding contest," President Bush said at a campaign-style rally yesterday in Omaha, Neb. "Those days must end."

Officials provided only sketchy details of spending cuts the administration plans to recommend in April, when a more complete budget will be sent to Congress.

Among those spending cuts offered yesterday: reducing the size of the federal work force, especially in management; curtailing grants to businesses for biotechnology research; a reduction in foreign aid to Israel; closing unneeded military bases; reducing subsidies for medical schools; and closing what the administration called a loophole that enable states to collect billions in federal money for hospital and nursing home reimbursements without proper oversight.

Overall, Bush's budget would cut the growth of federal spending in half, while still allowing the budget to increase by more than the rate of inflation.

Because the president is proposing relatively large spending increases in some areas -including the military, aid to schools, a stepped-up war on illegal drugs, new federal prisons and medical research - many other programs will have to be cut to hold down total spending.

White House aides say that pet projects promoted by powerful members of Congress are responsible for part of the recent increase in federal spending.

As the federal surplus has grown since 1998, so has the urge to spend. The last Congress approved more than 6,000 such projects, at a total cost of $16 billion.

Maryland projects

Maryland's senators and representatives, for example, won money for items ranging from Baltimore's light-rail system to waterway projects on the Eastern Shore to restoring the Chesapeake & Ohio Canal near Cumberland.

Further federal funding for many of those projects could be in jeopardy now, however, if Bush gets his way. Among the cuts being proposed by the administration is a 14 percent reduction in funding for the U.S. Army Corps of Engineers. Bush wants the government to give priority to completing current projects, rather than starting new ones.

Maryland projects still on the drawing board include dredging of the Chesapeake and Delaware Canal, which had already been put on hold this year, and a plan to straighten the "S" turn in the Tolchester Channel in Kent County.

Moderating spending

At a White House briefing, Bush's budget director, Mitch Daniels, told reporters that the administration would actually shut down very few federal programs.

"We did not come here to go to war with the spending run-up of the last few years," he said, "only to moderate it."

But, added Daniels, "I discovered that you don't have a lemon law for government programs in this town. Actually, you have a slightly different one. If a program that you bought this year doesn't work, you take it back, they make you buy a bigger one."

The administration says that if federal spending continued at the pace of the past few years, it would add a total of $1.4 trillion to the budget over the next decade, roughly the amount that Bush wants to return to taxpayers in the form of a tax cut.

Recent history suggests that the president would face an uphill struggle in trying to put the brakes on federal spending. Some Democrats are skeptical that Bush really intends to go all-out in attacking special-interest spending, especially when it collides with the interests of his administration and Republicans in Congress.

The `contingency fund'

In addition, they contend that Bush's budget uses dubious gimmicks such as a $1 trillion "contingency fund" to hide the fact that he has not yet made the hard choices about how, specifically, to pay for his priorities.

"The game is to get a tax cut passed first," said Robert Greenstein, executive director of the liberal Center on Budget and Policy Priorities. He argued that the White House invented the contingency fund "to camouflage the fact that their numbers don't add up. It's very clever."

He said the contingency fund was a catch-all for a variety of Bush initiatives that have yet to be added to the budget.

White House officials indicated yesterday that it could be used to make a $600 billion down payment on Bush's plans for partially privatizing Social Security, to pay for a missile defense system or for additional tax relief.

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