washingtonpost.com  > Politics > Special Reports > Taxes and Spending

Congress Unlikely to Embrace Bush Wish List

Experts Say Cuts in Farm Subsidies, Medicaid and Other Domestic Programs May Be Unrealistic

By Jonathan Weisman
Washington Post Staff Writer
Tuesday, February 8, 2005; Page A06

With his 2006 budget, President Bush delivered Congress a tall order, asking for at least six significant governmental reorganizations and an unprecedented five-year freeze in domestic spending to get control of the federal budget deficit.

Under the president's proposal, lawmakers would have to scrap much of the farm law they passed in 2002 to realize the $8.2 billion in cuts Bush expects from farm subsidies over 10 years. The federal student loan program would need to be restructured to find $10.7 billion over the next decade.

_____Budget Politics_____
Audio: Post congressional reporter Mike Allen discusses how the president's budget is being received on Capitol Hill.
_____Live Discussion_____
Transcript: Brookings Economist William Gale discusses the 2006 budget.
Transcript: Post's Jonathan Weisman

_____More Coverage_____
President Sends '06 Budget to Congress (The Washington Post, Feb 8, 2005)
Bush Calls for Familiar Trims (The Washington Post, Feb 8, 2005)
Troops' Pay Raise, Retooling Efforts Come With Price (The Washington Post, Feb 8, 2005)
Plan Avoids Rollbacks That Some Feared (The Washington Post, Feb 8, 2005)
For Budget Director, No Red Ink and the Skies Are Not Cloudy All Day (The Washington Post, Feb 8, 2005)

_____Message Boards_____
Post Your Comments

Bush hopes major changes to Medicaid, the federal health plan for the poor, will shave $45 billion from the program through 2015. He is counting on significant changes to the federal program that ensures private-sector pensions for a 10-year savings of $31 billion. A proposal to consolidate and then cut 18 community development programs from five Cabinet agencies would need a legislative response as well as a reorganization of congressional jurisdictions.

Separate legislation would probably be needed to eliminate federal subsidies for Amtrak, and Bush is counting on leases from oil exploration in Alaska's Arctic National Wildlife Refuge -- but Congress, again, would have to oblige. And all of that would have to be enacted this year, as lawmakers debate the most broad revision of Social Security since the program's inception.

"That is a lot of apple to bake," said former representative Charles W. Stenholm (D-Tex.), a budget expert.

Beyond those changes, the president has proposed trimming domestic spending at Congress's annual discretion from $391 billion this year to $389 billion next year and then freezing it at that level for five consecutive years. White House budget director Joshua B. Bolten suggested there was a precedent for such a request in the 1990s, when Republicans first took control of Congress. But domestic spending declined in only one year of that decade: 1996. Indeed, since 1962, domestic spending has never held steady or declined for two years in a row, let alone five, according to the Congressional Budget Office.

"It is ambitious," said Mark Zandi, chief economist at the economic forecasting firm Economy.com. "And if history is any guide, it's not going to happen."

In the run-up to this budget release, international lenders, bond and currency traders and the leader of the International Monetary Fund publicly implored the president to produce a credible plan to lower the U.S. budget deficit.

"We put together all the budgets with an eye to the credibility and confidence that the United States government has," said Bolten, a former executive at the Wall Street investment firm Goldman Sachs. "I think this budget should continue to attract a lot of confidence in both domestic and international markets."

But many analysts doubt that Congress will fully embrace the president's recommendations, and the greetings from Wall Street economists yesterday were not encouraging.

"Clearly their deficit numbers are not credible -- haven't been for the last few years and they shouldn't be looked at with much seriousness now," said David Greenlaw, an economist and fiscal policy expert at Morgan Stanley.

Edward McKelvey, an economist at Goldman Sachs, noted that all presidential budgets ask a lot from Congress. But by resolutely standing by his tax cuts, Bush has put an unrealistic onus on Congress to focus narrowly on finding spending cuts, he said, concluding, "I don't think it's politically realistic."

Bush's budget contains nearly $1.2 trillion in tax reductions over 10 years, most of which are designed to make permanent his first-term tax cuts.

Already, Bush is facing significant headwind. Sen. Thad Cochran (R-Miss.), chairman of the Appropriations Committee and an influential member of the agriculture committee, declared he would never go along with the president's agriculture proposals, which he said unfairly target cotton and rice growers in the Southeast.

CONTINUED    1 2    Next >

© 2005 The Washington Post Company