Republican congressional leaders met Wednesday in their continuing effort to map out a joint House-Senate agenda, but still have more questions than answers on how to write a budget in the era of surpluses.
House Speaker Denny Hastert, R-Ill., also met Tuesday evening in Ohio with House Budget Chairman John Kasich, R-Ohio, to discuss the fiscal 2001 budget resolution and Hastert's still unannounced plan for retiring the national debt.
They discussed how to effectively restrain government spending now that the federal budget is generating surpluses on the non-Social Security side of the ledger. Several GOP aides in both chambers have indicated the budget caps established in the 1997 Balanced Budget Act are essentially moot since the budget has been balanced well in advance of the 2002 target date.
But if GOP budget writers decide not to set total fiscal 2001 discretionary spending at the cap level, they are still grappling with how to impose fiscal restraint to ensure the entire projected on-budget surplus does not go to more spending.
The idea of freezing spending at the fiscal 2000 level is gaining support, although budget writers have not spelled out whether they would include fiscal 2000 emergency and one-time spending. And because the caps are current law, they may have to amend the 1997 BBA if they set the fiscal 2001 spending level higher than what the caps now call for.
Moreover, because the CBO assumes the caps will be adhered to in estimating the on-budget surplus, its crucial projection also may have to be adjusted if the budget resolution does not hew to them. One budget source said Kasich is focused on tax cuts as the only effective way to get the surplus money out of Washington so that it is not spent, and that he and Hastert have discussed writing the budget resolution to direct any money not used for tax cuts to go to paying down the national debt.
Kasich has also indicated that, aside from the tax initiatives the leadership has emphasized-the so-called marriage penalty, education savings accounts and tax credits for urban renewal-his primary goal is to leave room in the budget resolution for a "Bush tax cut," assuming that GOP presidential contender George W. Bush is in the White House next year.
But some of the ideas GOP leaders have floated thus far run contrary to some recommendations the Concord Coalition released Wednesday.
The group urged Congress to use realistic surplus projections in putting together the fiscal 2001 budget, not use the caps to estimate the size of future surpluses, "resist the temptation to pay for tax cuts or entitlement expansions with projected non-Social Security surpluses," and "agree on a new set of realistic spending caps and extend them for another five years."