By Peter Baker
Washington Post Staff Writer
Thursday, January 4, 2007
President Bush promised yesterday to produce a plan to balance the federal budget in five years and challenged lawmakers to slash their special pet projects in half next year, embracing priorities of the new Democratic leadership that will assume control of Congress today.
Appearing in the Rose Garden with his Cabinet, Bush said he has been encouraged by meetings with Democrats and thinks they can reach common ground on spending issues that have bitterly divided them for six years. He said that the budget proposal he will make Feb. 5 will erase the deficit by 2012, and he called on Congress "to end the dead-of-the-night" process in which earmarks are slipped into spending bills.
The president's announcements were greeted by Democrats as "me-tooism," as one senior leadership aide put it, that closely tracked goals outlined by the new majority. The incoming House and Senate budget committee chairmen have set 2012 as a target for balancing the budget, and the incoming House and Senate appropriations chairmen have decided to freeze earmarks this year and introduce further restrictions on such spending items, which are often called pork.
In trying to adopt such ambitions as his own, Bush hopes to regain the initiative after his party lost Congress in November and to counter his reputation as a president who took a budget surplus and turned it into record deficits, analysts said. Bush has never proposed a balanced budget since it went into deficit, never vetoed a spending bill when Republicans controlled Congress and offered little sustained objection to earmarks until the issue gained political traction last year.
But now for the first time since he took office, both parties have set a mutual target for eliminating the deficit -- an implicit agreement that raises the profile of the issue and may create a political imperative that prods the two sides to find ways to meet the goal or be held accountable for failing.
"We've all been entrusted with public office at a momentous time in our nation's history," Bush said. "And together we have important things to do. It's time to set aside politics and focus on the future."
Rob Portman, director of the White House Office of Management and Budget, made a point of calling Democratic leaders Tuesday night to preview the president's remarks. In an interview yesterday, he said the shared target was a powerful signal of progress.
"It makes a huge difference," he said. "It's good news for the taxpayers that you have both parties working toward the same goal."
They remain far apart, however, on how to get there, with Bush insisting yesterday that his tax cuts be made permanent and Democrats laying the groundwork for reversing some of those for the wealthiest taxpayers. Democrats responded to Bush's comments with deep skepticism. "It's real hard to look at the man's record and take him seriously on these issues," Kent Conrad (N.D.), the incoming Senate Budget Committee chairman, said in an interview. "He's got a lot to prove. Talk is cheap."
Bruce Reed, president of the Democratic Leadership Council and an aide to President Bill Clinton, said Bush must abandon some red-line positions to reach genuine agreement with Congress. "For Bush to announce that he shares Democrats' willingness to cut the deficit by 2012 doesn't mean a heck of a lot if he's ruling out any of the ways that Democrats want to get there," Reed said.
The dialogue on the eve of a new Democratic Congress felt reminiscent of 1995, when Clinton and new House Speaker Newt Gingrich (Ga.) jousted over balancing the budget. Gingrich and his Republicans vowed to eliminate the deficit in seven years; Clinton initially resisted, then announced his own 10-year balanced-budget plan. It took until 1997 for them to settle on a five-year balanced budget.
The deficit disappeared sooner than that, and when Clinton left office the nation had its first surplus in three decades. But fiscal fortunes took a turn under Bush as he ushered in huge tax cuts, an early recession took its toll and the attacks of Sept. 11, 2001, prompted a wave of new spending on the military and homeland defense.
After the deficit spiraled to a record $413 billion in 2004, Bush promised to cut it in half within five years. Using as a starting point a higher projection that the deficit never reached, Bush achieved his goal last year when the deficit fell to $248 billion on the strength of better-than-expected revenue. Bush credits his tax cuts with spurring the economy and in turn producing more tax receipts.
But the government has spent more than $500 billion so far on the wars in Iraq and Afghanistan and counterterrorism operations elsewhere, and Bush plans to submit a new supplemental spending request at the same time he announces his regular budget next month, possibly near $100 billion.
Portman said that although war costs are appropriated separately, they will be counted in terms of balancing the budget by 2012. He offered no details about how Bush will accomplish that, other than saying that no tax increases will be included. Bush's past two budgets have frozen or even reduced non-security discretionary spending.
"It's going to require spending discipline," Portman said. "We've done a better job the last couple years."
Bush took aim at congressional perks as part of his message of fiscal discipline, praising Democrats for imposing a one-year moratorium on earmarks, proposing that they cut them in half next year and suggesting that the process be more transparent.
"One important message we all should take from the elections is that people want to end the secretive process by which Washington insiders are able to get billions of dollars directed to projects," he said. He also called again for a line-item veto.
Democrats plan to introduce legislation requiring lawmakers to attach their names to earmarks and to certify that such spending items would not financially benefit them or their spouses. "Given the track record of this administration, the last person in the universe who should lecture the Congress on fiscal responsibility is George Bush," said incoming House Appropriations Committee Chairman David R. Obey (D-Wis.).
Brian M. Riedl, an analyst at the Heritage Foundation, said the discussion of earmarks and a 2012 balanced budget will mean little unless Bush and Democrats tackle entitlements. With the cost of Social Security, Medicare and Medicaid on the rise, Riedl said he projects the annual deficit will grow to $750 billion in 10 years. "The reduced deficit of the last two years looks more like a short-term blip than a long-term trend," he said.