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Congress Getting Around Budget Limits

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  • By Eric Pianin and George Hager
    Washington Post Staff Writers
    Saturday, October 16, 1999; Page A1

    The nation's defense contractors will have to wait an extra week to get paid this year. Routine maintenance of Pentagon facilities will be considered "emergency" spending. To keep from cutting education and health programs, lawmakers plan to borrow $15 billion from next year's budget.

    As the Republican-controlled Congress struggles to complete work on the budget by its deadline Thursday, it is relying to an unprecedented degree on creative accounting to boost spending beyond what its rules allow. All told, congressional budgeteers have manufactured an additional $46 billion to spend this year on defense, farms, education and other programs.

    The extra money has boosted congressional Republicans' confidence as they prepare for another showdown with President Clinton. Nobody is predicting a government shutdown when a temporary spending resolution expires Thursday, but GOP leaders hope they have found the funds necessary to keep their members in line as they enter final negotiations with the president over several contentious spending bills.

    Still, the situation underscores the immense difficulty of writing budget discipline into law and how easy it is for Congress and the president to circumvent what were supposed to be ironclad limits designed to keep spending in check. Under the 1997 balanced-budget agreement, the federal government was supposed to spend only $592 billion in the 13 bills funding government's daily operations this year but Congress is on target to spend roughly $640 billion.

    Clinton and congressional Democrats have derided the GOP budget tactics as "reckless partisanship" and a "magic show," but they have colluded in the mushrooming use of "gimmickry," as critics call it. Indeed, independent budget experts on the right and the left say Congress is masking the true size of its spending binge and could create serious budget problems when the obligations for the delayed spending come due. The actions also call into question whether the government will realize soaring surplus projections, which depend heavily on Congress ratcheting down on spending.

    "To the extent this approach is effective, it creates a bigger hole that has to be filled the following year," said the Brookings Institution's Robert D. Reischauer, a former director of the Congressional Budget Office. "In a sense, this is short-sighted."

    Stephen Moore, a budget expert with the libertarian Cato Institute, complained that the congressional budget strategy "makes the public believe the Republicans are using the same tactics the big-spending Democrats used when they ran the place."

    "Most conservatives respond to these 'blue smoke and mirror' tactics with a sense of rage and betrayal," Moore added.

    Republican leaders say their approach is essential to completing work on spending bills without breaking their pledge not to dip into surpluses generated by Social Security payroll taxes. They dismiss the charges of gimmickry, arguing that money is simply being credited to the year in which it will be spent. They also say they are struggling to meet unexpected demands from wars, natural disasters and other problems.

    "There's no smoke and mirrors in our budget at all," said Senate Appropriations Committee Chairman Ted Stevens (R-Alaska), one architect of the GOP spending strategy.

    Whatever the merits of the approach, the process of finishing the 13 appropriations bills appears to be lurching to a conclusion. Only five of the bills have been signed into law, but congressional leaders say the rest should be on the president's desk by Thursday. While Clinton has threatened to veto five of the bills, Republicans plan to blame him for drawing out the process and "raiding" Social Security if he forces them to work past the deadline.

    "It is clear that the president wants to spend more money," House Speaker J. Dennis Hastert (R-Ill.) said yesterday.

    In the big picture, Republicans and Democrats are not far apart on the overall level of spending they are seeking. The difference between the two sides is about $20 billion or a small fraction of the $167 billion surplus projected for the current fiscal year. But much of that surplus comes from Social Security, and the Republicans and Clinton have promised not to touch those funds. Hence, lawmakers have found themselves in a spending straitjacket and in desperate need of creative accounting.

    In recent years, for instance, Congress and the administration have balanced out their numbers by borrowing funds from future appropriations. Last year, Congress agreed to $11.6 billion of such advanced appropriations. This year, congressional Republicans plan to borrow twice that amount, including funds for education, job training programs and rental housing subsidies. That will make it even more difficult to keep spending down when they consider the same programs a year from now.

    And with the approval of an $8.7 billion farm bailout this week, Congress has declared a total of $22 billion in spending "emergencies" that also do not count against the budget limitations. Other such emergencies include spending for the 2000 census to conform to a court order, fuel assistance for the poor, and maintenance of Pentagon barracks and facilities.

    That would exceed the $21 billion of emergency funding approved last October during year-end negotiations between Clinton and congressional leaders. Many Republicans said that amount was outrageous, and they vowed not to let it happen again.

    Even with this more aggressive use of these budget tactics, the Congressional Budget Office has estimated that lawmakers would still tap the Social Security surplus by anywhere from $13 billion to $20 billion. Republicans may have to resort to an across-the-board spending cut of 1 to 2 percent to keep from doing that.

    Meanwhile, congressional Democrats are blasting Republicans for what they describe as budgetary sleight-of-hand. "Talk about putting yourself in a straitjacket and plunging into a tank of water the GOP magic show is creating a gigantic hole in next year's budget," said Rep. David R. Obey (D-Wis.). "But the biggest hole they've created is in the public's confidence in government."

    However, House Appropriations Committee Chairman C.W. Bill Young (R-Fla.) said: "We've spent a lot of time reviewing these bills trying to find an easy way of doing it, . . . and this may be the only way to do it."

    © 1999 The Washington Post Company

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