President Bush's call for spending cuts to offset the cost of hurricane relief has sharply split the Republican Party, with small- government conservatives emboldened to scale back the overall reach of government while moderates drive for more anti-poverty spending, not less.
The rift is growing wider as Congress moves toward a late-October deadline to produce legislation saving at least $35 billion from social welfare and health care programs over the next five years. That target was set this spring by a budget blueprint that narrowly passed Congress, largely along party lines.
Now, House Republican leaders, with Bush's encouragement, hope to raise the target to $38.5 billion, while cutting billions more from other federal programs. Some House conservatives say if they don't get at least that much, they may revolt against the GOP leaders.
"I can tell you if we don't see more than rhetoric, this leadership team is not secure," said Rep. Jeff Flake (R-Ariz.).
For moderate Republicans and Democrats, Hurricane Katrina and its aftermath proved the need for more government, not less. Calls for austerity in other anti-poverty programs to pay for hurricane relief have elicited major protests -- especially since nearly $300 billion in emergency spending on the war in Iraq has never been offset by cuts in other areas or tax increases.
"There's this pent-up feeling that we've been working too hard on the president's agenda and not enough on what we want," said Rep. Christopher Shays (R-Conn.), an outspoken moderate.
After nearly five years of budget busting, the rush of spending since Katrina struck the Gulf Coast has awakened Congress's interest in controlling the budget deficit. With $71 billion in Katrina-related spending and tax cuts passed so far, a deficit projected to be around $314 billion for the fiscal year that began this month could be pushed toward $400 billion.
To stem that tide, House Budget Committee Chairman Jim Nussle (R-Iowa) yesterday proposed increasing the $35 billion entitlement savings target by 10 percent, to $38.5 billion, while imposing a 2 percent across-the-board cut to federal programs subject to Congress's annual spending bills. That "haircut" would produce $16 billion in savings, still far short of the hurricane relief already approved.
"This is a down payment," he said. "This is not making that much of a dent in the total amount that will be needed to deal with all the proposals in their totality for the Gulf."
But for all the talk of fiscal discipline since Katrina hit, the momentum may be going in the opposite direction. Northeastern Republicans yesterday backed an amendment offered by Sen. John F. Kerry (D-Mass.) that would boost home heating assistance for low-income people by $3.1 billion, to help cope with soaring natural gas and fuel costs.
Sens. Olympia J. Snowe (R-Maine) and Blanche Lincoln (D-Ark.) are resurrecting legislation that would expand the benefits of the child tax credit by granting rebates to families too poor to pay income taxes -- at a cost of about $1 billion a year.
And with the Senate Finance Committee deeply divided since Katrina, Chairman Charles E. Grassley (R-Iowa) is trying to expand Medicaid and cut it at the same time. Last night, Grassley presented Republican committee members draft legislation that would cut Medicaid's growth by as much as $12 billion over five years, exceeding the goal laid out in the budget. But most of that savings in spending on medical care for the poor would be lost with an expansion of Medicaid eligibility and federal reimbursement spending to help Katrina's evacuees.
Most of the budget cutting in the legislation would instead come from Medicare, according to a senior Senate budget aide, who spoke on the condition of anonymity because the plan is still tentative. But those savings would also be diminished by higher payments to hospitals, doctors and other Medicare health-care providers for the elderly.
Sen. John E. Sununu (R-N.H.), who supports more spending on home heating assistance but deep cuts elsewhere to offset hurricane spending, said such choices can be made.
"When oil is over $65 a barrel, when natural gas prices are shooting up, there is a need for more assistance," he said. "What we don't have is a need for $25 billion in highway earmarks and energy tax breaks to oil and gas companies when they are enjoying record profits. There are plenty of avenues to pursue fiscal restraint."
In the House, budget cutters may have more momentum, but they will have problems of their own. Rep. Mark Foley (R-Fla.), a moderate on the Ways and Means Committee, said his panel has made little progress meeting the demands in the budget for $1 billion in savings from programs under its jurisdiction. Raising the bar higher, as Nussle has proposed, "could be rhetoric," he said.
Nussle said yesterday the biggest obstacle to his plan is the Senate, but with White House help the cuts have a chance.
"This will take the president's leadership," he said, not just in pushing lawmakers but making the case to voters. "If we don't get that, it will be an unfortunately proud exercise but not one that will become law."
Some moderate Republicans say that is not likely to help. They increasingly believe that efforts to meet the president's deficit-reduction goals are preventing them from pursuing their own policy goals.
"We have some heavy lifting to do," Foley said. "There's no question."