Limits expire, deficit grows

Last of budget restraints ends as Congress favors election-year spending

`Fiscal chaos' predicted

Reluctance to back curbs that would foil fulfillment of campaign promises

May 13, 2002|By Karen Hosler | Karen Hosler,SUN NATIONAL STAFF

WASHINGTON - For the first time in nearly two decades, Congress began this year doling out federal cash unfettered by budget caps. The lawmakers are spending as if they had just won the lottery - and their binge threatens to get worse.

"We just spend and spend and spend around here like there is no tomorrow," said Sen. George V. Voinovich, an Ohio Republican. "As a senator who came here to bring some fiscal discipline to this place, I am just dismayed by our complete lack of fiscal responsibility."

The last in a 17-year series of budget restraints, which helped convert a deficit left from the Vietnam War into a surplus by 1998, expires this year. And as those budget limits are fading, the deficit is growing again.

Democrats say the red ink stems largely from President Bush's $1.35 trillion tax cut, which they call excessive. They say the tax cut has fueled the deficit, just as President Ronald Reagan's tax cut did 20 years ago.

Republicans say Democrats are to blame for having bloated federal programs. They point to the recently passed farm bill, which boosts federal crop subsidies by 80 percent, and to a Democratic drive to secure health care for workers hurt by trade deals.

Yet lawmakers in both parties seem to feel little regret about driving the government deeper into debt for military and homeland-defense initiatives. A House committee has added $2 billion to President Bush's request for $27 billion in emergency aid for defense and counterterrorism. The figure is expected to rise again before the measure reaches Bush's desk.

The full House, meanwhile, has voted to provide money for the $11 billion Crusader artillery system, which the Pentagon says it doesn't want.

"The war profiteering continues," said Sen. John McCain, an Arizona Republican who contends that the war on terrorism is often used to justify wasteful spending.

Nor do lawmakers appear to fear political retribution for borrowing heavily from Social Security surpluses, rather than using that money to pay down the federal debt. Once the attacks of Sept. 11 opened the symbolic Social Security "lockbox," Congress never looked back.

This year's deficit - after the $163 billion Social Security surplus for the year is used - is projected to exceed $100 billion. Congress will soon have to raise the $5.95 trillion debt ceiling so the government can keep borrowing money to pay the bills Congress is racking up. House Republican leaders are trying to devise a way to do so without having take a separate vote on it.

"Republicans love to talk about all of us being responsible," said Rep. Richard A. Gephardt of Missouri, the House Democratic leader. "This is a time for them to be responsible for what they've done and what they think should be the priorities of the country. They want to eat the steak dinner. They don't want to pay the bill."

A small, bipartisan band of lawmakers is seeking to reimpose the spending curbs, which were last renewed for five years in the balanced-budget deal of 1997 and do not apply to the budget now being crafted. Their effort, though, appears quixotic.

Control of the Republican-led House and the Democratic-led Senate is at stake in the fall elections. Not even a tight-fisted president seems willing to face the political perils of trying to rein in spending.

"Neither party wants to take the risk of alienating voters by imposing spending curbs that might prevent them from making good on their promises - whether it's tax cuts for Republicans or social programs for the Democrats," said Robert D. Reischauer, former head of the Congressional Budget Office.

The two parties are so divided over their priorities that the almost evenly split Senate can't muster the votes to pass a budget blueprint. So congressional appropriators, who don't much care for budget shackles anyway, are happily beginning the work of divvying up nearly $800 billion to finance the government next year with no clear spending guidelines.

"If we go into this process without rules and get into one of those bidding wars, it will be fiscal chaos," warned Sen. Phil Gramm, a Texas Republican.

Gramm was the chief author of the first in the series of budget restraints that were intended to help Congress do what it finds so hard to do on its own: to say no to constituents and lobbyists who are pleading for federal money.

The 1985 Gramm-Rudman Act was designed to make automatic cuts in federal spending if Congress failed to reach deficit-reduction targets on its own. Voided once by the Supreme Court as an unconstitutional transfer of Congress' power of the purse to the executive branch, the device was rewritten and re-enacted in 1987.

Across-the-board cuts were never made. But the threat of them forced Congress to negotiate with the first President Bush in 1990 over how to erase the deficit. The elder Bush and the lawmakers struck a deal that forced him to break his pledge not to raise taxes - a step that contributed to his failure to win re-election.

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