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Deficit Worries Threaten Bush Agenda

GOP Lawmakers, Others Say War and Recession No Longer Justify Mounting Debt

By John F. Harris
Washington Post Staff Writer
Monday, February 7, 2005; Page A05

In 1992, Ross Perot likened the federal budget to a patient spurting blood in an emergency room. "Step one is to stop the bleeding, and we are bleeding arterially," the independent presidential candidate declared at one of that year's debates.

It has been a while since Americans routinely heard metaphors like that. But signs are blossoming that deficit politics is finally making a comeback -- with big implications for the expansive second-term agenda promoted by President Bush.

_____More Coverage_____
President Sends '06 Budget to Congress (The Washington Post, Feb 8, 2005)
Cheney: Social Security Plan to Cost Trillions (The Washington Post, Feb 7, 2005)

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Concern by fellow Republicans about borrowing as much as $2 trillion in transition costs, for instance, is one of the big problems facing his plan to restructure Social Security to allow individual investment accounts.

And as Bush prepares to release his proposed fiscal 2006 budget today, some Republican lawmakers and fiscal experts are warning that the arguments he invoked in his first term for tolerating big deficits -- mainly the twin demands of war and recession -- are no longer sufficient to justify mounting debt. In last week's State of the Union address, the president himself promised a new austerity in domestic programs.

"Personally, I think we are setting ourselves up for problems" unless Republicans begin living up to their reputation as a tough-on-spending party, said Rep. Michael N. Castle (R-Del.), a former governor who since coming to Congress in 1993 has been known as one of the party's "deficit hawks."

In the decade since the GOP took power on Capitol Hill, including four years in which there has also been a Republican president, Castle said, "I can't tell you that pork-barrel spending has changed one bit from Republicans to Democrats."

Some analysts say mounting public concern over a record projected deficit for this fiscal year of $427 billion will soon have Washington reprising the arguments of the 1990s. For years, nearly every domestic policy debate was tinged by concern over the deficit, and the issue was a major engine for figures as diverse as Perot and former House speaker Newt Gingrich (R-Ga.).

A season of surpluses at the end of Bill Clinton's term meant that it "got stuck in everyone's head that we don't need to worry about the budget again," said Robert Bixby, the executive director of the Concord Coalition, a bipartisan group devoted to fiscal responsibility. "I do think deficit politics is coming back, but I don't think people have confronted what that means yet. People are still pursuing politically painless options."

Touting his agenda in Omaha last week, Bush said the fiscal and political climate is changing. "People in Congress on both sides of the aisle have said, 'Let's worry about the deficit,' " Bush said in Omaha, where he was pressuring lawmakers to allow private Social Security accounts. "I said, 'Okay, we'll worry about it again.' The last budget worried about it; this budget will really worry about it." The president has said his budget will reduce or eliminate more than 150 programs.

But this vow comes against a record in which a Republican Congress and president passed the largest expansion of a domestic entitlement program in decades -- a $500 billion prescription drug benefit under Medicare -- as well as tax cuts. Combined with other national security and domestic spending, these policies took an $86 billion surplus in fiscal 2000 to a record $412 billion deficit last year.

"Republicans are now being dragged back into fiscal restraint, kicking and screaming," said Brian M. Riedl, a budget analyst at the conservative Heritage Foundation. Although he says the annual budget deficit is "an overrated statistic," Riedl said he welcomes the return of a debate that asks "where to cut, not where to expand" the federal government.

It's not only budget numbers that are chastening the GOP. Public opinion may be doing the same. A Washington Post-ABC News poll last month found that 58 percent of people disapproved of Bush's handling of the deficit issue, while 39 percent approved. The same survey found 62 percent registering doubt that he will make much progress on the issue during a second term.

And although deficits have not been a paramount political issue during recent years, a recent survey by the Pew Research Center found that 56 percent of voters now identify the budget deficit as a "top priority," up from 51 percent a year ago and from 35 percent three years ago. Still, this climbing concern does not match the salience the deficit issue had in the 1990s: In 1994, the year Gingrich's GOP seized control in the House -- with a promise to pass a balanced-budget amendment the lead item in the "Contract with America" -- 65 percent of Americans said taming the deficit was a top priority.

"I do see a lifting of awareness about the issue," Castle said, "but nowhere near what it was [during the 1990s]. . . . It may be coming back slightly, but I don't see it back yet as a large public concern."

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