Blue Dogs Take Aim At Record Deficits

In Ideological Divide, Conservative Democrats Seek Fiscal Discipline

Conservative Democrats in the House are challenging their own party to do more to balance the federal budget and restrain government spending, highlighting an ideological division among Democrats that could play a big role in the party's 2008 presidential campaign.

The Blue Dog Coalition, a band of more than 40 House Democrats committed to fiscal discipline, plans to introduce legislation today that would impose caps on some spending, enshrine pay-as-you-go rules in federal law and authorize automatic spending cuts to enforce them. The group also wants to amend the U.S. Constitution to require a balanced budget and to create an array of budget provisions that would focus more attention on what it sees as pork-barrel spending.

The three bills would go beyond budget rules so far enacted by the new Democratic majority, which has adopted a blueprint for balancing the budget by 2012. And they would take budget policy in a different direction from the leading Democratic presidential candidates, none of whom wants to tie his or her hands by promising to erase the federal deficit while in office.

Former U.S. senator John Edwards has been particularly blunt, explaining in campaign appearances that he considers a balanced budget to be less important than other priorities.

"Senator Edwards supports the goal of a balanced budget and has been honest and specific about how he's going to pay for each his proposals. [But] he believes that universal health care, improving education and building a new energy economy are more immediate priorities," said Edwards spokesman Eric Schultz.

That view contradicts the beliefs of many conservative Democrats, whose numbers swelled in Congress after last fall's election, helping the party regain control of both the House and Senate. Cleaning up a fiscal situation that has included record deficits and trillions of dollars in new debt was an important part of the party's message in 2006, said Rep. Allen Boyd (D-Fla.), a Blue Dog leader, and he added that Democrats abandon it at their peril.

"If you're saying it's okay to do new projects without knowing how we're going to pay for them, that's wrong," Boyd said. "We need to act now and not saddle our children and grandchildren with the burden of these huge debts. We've been selfish about this long enough."

Democratic strategists said the battle between balanced budgets and pressing social needs has long divided the party. Deficit reduction was a stated Democratic priority through the 1990s, when a Democratic Congress enacted laws to cap discretionary spending and to require any increases in mandatory spending, such as Social Security or Medicare, to be made up through budget cuts or tax increases elsewhere. After Bill Clinton moved into the White House in 1993, he worked with Republican congresses to produce multiple balanced budgets, the first in a generation.

But lawmakers' appetite for spending restraint collapsed during the surpluses of the late 1990s. After President Bush took office, Republican enthusiasm for big tax cuts combined with a demand for increased spending related to the 2001 terrorist attacks -- as well as a new Medicare prescription drug benefit -- to replace the surpluses with record deficits.

With even many Republicans furious about the pace of federal spending under Bush and the Republican Congress, Democratic candidates last year cast themselves as a more responsible alternative. After taking control of Congress, House and Senate Democrats quickly restored pay-as-you-go budget rules that had been allowed to expire in 2002. Those rules required that spending increases or tax cuts be offset dollar-for-dollar so as not to raise the budget deficit. But last year's measures did not cap discretionary spending or write the rules into law, as the Blue Dogs propose to do.

This spring, Democratic leaders in both chambers beat back requests from the liberal wing of the party for billions of dollars in new social spending, approving a five-year budget blueprint projected to achieve balance in 2012.

Richard Kogan, a senior fellow at the Center on Budget and Policy Priorities, said Democrats were able to hold together in part because, in this political environment, fiscal discipline means opposing efforts by a Republican White House to extend Bush's tax cuts past their 2010 expiration date, a move that would deprive the federal government of billions of dollars in revenue.

But that consensus is likely to evaporate if a Democrat wins the White House next year, said Andrei Cherny, co-editor of Democracy, a quarterly journal devoted to liberal ideas. The magazine is hosting a forum today titled, "Balanced Budgets: Holy Grail or Overrated?" featuring such Democratic heavyweights as former Treasury secretary Lawrence Summers; Clinton economic adviser Gene Sperling; former Virginia governor Mark R. Warner; and Jeff Faux, founder of the Economic Policy Institute, a District think tank.

"What is now a consensus in Congress will quickly dissolve into a real vigorous debate about what is most important. The trade-offs are fiscal discipline versus health care and energy independence and all the other things Democrats believe in passionately," Cherny said.