House Republican leaders raised the stakes this week in a looming budgetary showdown, pledging to lift the target of entitlement cuts from $35 billion to $50 billion, impose across-the-board spending cuts and rescind spending already approved -- all to offset the cost of hurricane relief.
The move, announced at a closed-door meeting of House Republicans Thursday night, would cut tens of billions of dollars from entitlement programs for the poor, such as Medicaid, but could touch virtually every aspect of government. House Budget Committee Chairman Jim Nussle (R-Iowa) said he will insist that across-the-board cuts of up to 2 percent apply even to homeland security and defense programs, which had been exempted from previous budget-cutting measures.
Yet congressional spending continued apace yesterday. The Senate approved a $445 billion defense spending bill for fiscal 2006 that includes $50 billion in additional funding for the Iraq war while instructing the Pentagon to change its interrogation methods for military detainees. The bill, approved 97 to 0, would spend $3.9 billion to combat avian flu, in part by stockpiling vaccines. It also includes a 3.1 percent pay raise for military personnel and $1.3 billion in emergency funding for new equipment for the National Guard and the reserves.
The next step is a House-Senate conference committee, where lawmakers will work through differences between the two bills, including a $5 billion gap in Iraq war funding. The Senate wants to spend $50 billion; the House favors $45 billion.
The push for austerity comes amid some good budget news. The federal budget deficit for the fiscal year that ended Sept. 30 came in at $317 billion, the Congressional Budget Office said, or 2.6 percent of the economy. That is nearly $100 billion less than the 2004 deficit and $14 billion less than what the CBO projected just eight weeks ago.
Separately, CBO Director Douglas Holtz-Eakin predicted that the federal cost of Hurricane Katrina relief is likely to fall well short of the $200 billion estimates bandied around last month, and possibly less than $150 billion.
But House Republicans now seem driven by conservative constituents who are fed up with deficit spending and the relentless growth of government since President Bush came to office, House members and aides said. Lawmakers went home yesterday for a week-long break, and they expect to get an earful about the $70 billion in tax cuts and spending already approved in the wake of Katrina, said Sean Spicer, spokesman for the House Republican Conference.
"When our members go home, they'll hear from constituents, and it's going to be 'Spending, spending, spending -- what are you people doing?' " he said.
Turning that newfound zeal for fiscal austerity into budgetary reality will not be easy, and satisfying some constituents risks running afoul of others when the details of the cuts emerge. Sixteen committees in the House and Senate face an Oct. 26 deadline to produce $35 billion in budget savings over five years, mainly from entitlement programs for the poor, such as food stamps, Medicaid and student loans. That savings level was set this spring in a hard-fought budget resolution that passed largely along party lines. The deadline could slip, however, as House committee chairmen scramble to find an additional $15 billion in savings.
A broad coalition of 750 social welfare groups and liberal activists are circulating a petition on Capitol Hill, eliciting pledges against further budget and tax cuts this fall.
Senate Democrats sent a letter to Senate Majority Leader Bill Frist (R-Tenn.), urging him to again postpone consideration of budget cuts.
"In our view, hurricane and energy price relief should be Congress's top priorities. Yet rather than addressing the urgent needs of survivors and families and businesses suffering from rising gas prices, the Republican congressional leadership is pursuing reconciliation legislation that could only worsen their plight, with cuts in Medicaid, food assistance and other benefits," the letter said.
Senate committees have already run into trouble finding even that level of savings. The Senate Agriculture Committee had to cancel a meeting to draft its share of the cuts -- $3 billion -- after panel members grew incensed by the initial proposal of Chairman Saxby Chambliss (R-Ga.). Unwilling to take the savings solely from farm price supports, he spread the pain to the federal food stamp program and to land-conservation efforts, angering Democrats.
Agriculture interests balked at what they saw as an unfair preference for some dairy farmers at the expense of other farmers.
Senate Finance Committee Chairman Charles E. Grassley (R-Iowa), tasked to produce nearly a third of the original entitlement savings, is struggling to win the votes for a complex bill that would simultaneously expand Medicaid for hurricane evacuees and hold off on a substantial cut in payments to physicians for Medicare treatment while cutting the growth of both programs overall. According to committee aides, Grassley has produced two packages, one that would cut as much as $16 billion and another that sticks closer to the original $10 billion. GOP leaders want the higher number, but the lower figure may be the only one that is politically possible.
"Things aren't going so well," one Senate leadership aide conceded.
Even in the House, leaders may have ordered up an across-the-board spending cut and a package of "rescissions" that would excise funds already allocated, but passage is anything but assured once the details emerge.
Staff writer Shailagh Murray contributed to this report.