White House and congressional budget negotiators finally got down to business yesterday as President Bush's budget director put forth a revised proposal he claimed would cut the fiscal 1991 deficit by $50.4 billion and save $444 billion over the next five years.
Democrats criticized as inadequate Office of Management and Budget Director Richard G. Darman's plan, which is a modification of the budget the president submitted at the beginning of the year. Many of the changes only exacerbate the objections Democrats had with the Bush spending outline.
"It's a warmed-over version of their budget proposal in January," Senate Budget Committee Chairman Jim Sasser (D-Tenn.) said after hearing Darman's presentation. "Simply putting a new suit on that old corpse isn't going to revive it."
"I'm not surprised and I'm not encouraged," said House Budget Committee Chairman Leon E. Panetta (D-Calif.).
Darman and GOP lawmakers stressed that the new proposal, which the OMB director prepared without consulting Republican budget leaders in Congress, was an opening gambit. "It's a good starting point and will permit us to proceed with significant negotiations," said Sen. Pete V. Domenici (R-N.M.), the Senate Budget Committee's ranking GOP member.
"It won't be our first, it won't be our last," Darman said as he entered yesterday's talks.
Democrats, including House Majority Leader Richard H. Gephardt (D-Mo.), are pressing for a package saving between $500 billion and $600 billion over five years, and said Darman's proposed five-year savings were too low. Bush's original budget claimed savings of $291 billion over that period.
The administration's new proposal shows only a slight change in priorities from its original proposal. Asked whether the administration had nickeled-and-dimed its way to the bigger deficit-reduction figure, an administration official said, "I wouldn't say nickels and dimes. Halves and dollars, maybe." It calls for saving $17.1 billion in the fiscal year beginning Oct. 1 from such programs as Medicare and farm subsidies, whose spending is determined by law, according to participants.
That is $4.3 billion more than Bush had originally sought.
Lawmakers had doubted that even the earlier, lower cut could be achieved. The House-passed budget called for savings of $1.9 billion in those programs while the Senate Budget Committee's spending plan set the cut at $4.2 billion.
The new plan also calls for $4.2 billion in savings from other domestic programs, which Bush had originally proposed boosting by $700 million. The Senate Budget Committee called for cutting $3.6 billion from those programs while the House would add $5.2 billion to them.
Military spending would be cut $5.9 billion, nearly double the $3.2 billion savings the administration originally sought. The Senate panel's measure would pare $13 billion from Pentagon accounts and the House budget would save $11.5 billion.
The plan calls for $13.9 billion in new revenues, as did Bush's original budget, but raises the target for new federal fees to $6.2 billion from $5.6 billion.
The intensified activity came as the administration dramatically raised its projection of next year's deficit. Darman startled negotiators by announcing that OMB had revised its deficit projection for fiscal 1991 to $159 billion from the $137.9 billion forecast the OMB director issued fewer than four weeks ago. The administration's January budget proposal estimated the deficit to be $100.5 billion.
Congressional Democrats continue to suspect that Darman deliberately underestimated the projected deficit in January to avoid making tough decisions. But OMB officials insist that their earlier projection and their subsequent revisions have been made in good faith.
Staff writer Steven Mufson contributed to this report.