Since the top Republican congressional leadership and budget committee chairmen agreed in early March to a fiscal 2000 budget framework based on sticking to the 1997 Balanced Budget Act's spending cap, and agreed not to spend the "Social Security surplus," pundits, the press and even fellow Republicans have predicted they will be forced to break the cap and dip into the politically sacrosanct Social Security trust fund.
Under this year's budget resolution, Congress must cut spending from the fiscal 1999 level of $564.6 billion, which includes the $20.8 billion in emergency fiscal 1999 spending, but not the one- time International Monetary Fund payment of $17.8 billion, to the fiscal 2000 cap of $538 billion.
At each step along the way, from adopting the budget resolution and the resulting 302(b) Appropriations subcommittee spending allocations for fiscal 2000, to the release of the Congressional Budget Office's budget re-estimate July 1, and through passage of the initial fiscal 2000 appropriations bills, GOP leaders in both chambers have deferred making the toughest calls on spending cuts until later in the process.
But appropriators have worked their way through all but the final spending bills facing the deepest cuts, the Veterans Affairs-Housing and Urban Development and particularly the Labor-Health and Human Services measures, and "later" is fast becoming "now." That means the question of how to stick to the caps and pass appropriations bills must be answered in the immediate future.
House Military Construction Appropriations Subcommittee Chairman David Hobson, R-Ohio, was confident of the ultimate outcome, if a bit unsure of how the congressional leadership will get there.
Hobson believes House leaders can get the remaining bills through the House, "But where I think the bubble breaks is in the Senate and in the conference committee. ... The day will be here and the powers that be will have to react, and I don't think most members know where that is."
The CBO now projects a fiscal 2000 budget surplus, excluding Social Security, of $14 billion. The tax bill passed by the House last week would cut taxes by $5 billion in fiscal 2000, while the tax bill before the Senate this week contains a net fiscal 2000 tax cut of $4 billion.
Theoretically, the portion of the $14 billion on-budget surplus not devoted to tax cuts is available to pay for discretionary spending above the cap.
Senate Budget Committee Chairman Pete Domenici, R-N.M., said he is not worried. "Be patient, it will all work out. We'll get the bills in shape so they have bipartisan support and can be signed by the president," he said. When asked if that meant breaking the caps, Domenici responded, "I didn't say that."
But Senate Appropriations Committee Chairman Ted Stevens, R-Alaska, did; he laid claim last week to the chunk of on-budget surplus not devoted to tax cuts. Stevens said his committee could bust the fiscal 2000 outlays cap of $578 billion by about $9.9 billion, and the budget authority cap of $538 billion by as much as $11 billion to provide additional funds for the Labor-HHS bill.
However, a Senate leadership aide said pointedly, "That has not been decided yet."
Aside from the on-budget surplus, appropriators are working in conjunction with the budget committees and their leadership to find other sources of funding or savings from mandatory spending to cushion the cuts that otherwise must be made to stay under the caps.
Whether those offsets are seen as "real" or "gimmicks" is likely to be one battleground in the budget debate as the Sept. 30 deadline for enacting next year's appropriations bills draws closer.
Among the options available to pay for spending beyond the caps is forward funding some programs, so the money is not paid out until future fiscal years.
Another is "directed scoring," whereby the budget committees direct the CBO to rescore how funding for a particular program is spent to a lower level, thus reducing the amount counted against the cap limits.
Directed scoring already has produced roughly $10 billion in additional money for the Defense bills. It also could be used to apply funds from the HUD Section 8 low-income voucher program to other portions of the VA-HUD bills.
Much of the House and Senate Labor-HHS bills, on the other hand, will have to be filled out with savings from the mandatory programs within their jurisdiction.
The leading candidates to make up the $11 billion difference between the fiscal 1999 Labor-HHS spending level and the fiscal 2000 allocation level are administrative savings in the states' annual welfare block grants, and reducing the minimum reimbursement states get to cover the federal share of running their Medicaid programs.
While popular options on Capitol Hill, any notion of cutting the federal government's payments to the states has met with stiff resistance from the governors.
Another tried and true source of "savings," invoked earlier this year to pay for supplemental fiscal 1999 appropriations for Kosovo operations, defense readiness needs and disaster relief, is the emergency spending designation, which made its first appearance in the fiscal 2000 cycle at last week's House Appropriations Commerce- Justice-State Subcommittee markup.
To ease its passage, the full $4.5 billion provided in the $35.8 billion bill for the 2000 census was designated as emergency spending, and therefore does not count against the caps.
Appropriations ranking member David Obey, D-Wis., criticized the designation and the entire spending cap scheme established in the Balanced Budget Act of 1997 as "a public lie," saying the caps are unrealistic.
Obey added that because of the caps, the Commerce-Justice- State, VA-HUD and Labor-HHS bills "are being squeezed and put through incredible contortions to facilitate the illusion" that the caps can be maintained. That problem, he said, is "massively compounded" by the tax cut package.
"We are prisoners on a runaway train and that train is hell- bent to run over whatever is on the track in pursuit of its tax cut," Obey said.
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