Senate budget leader concedes rise in federal spending

Senate Budget Committee Chairman Pete Domenici, R-N.M., Tuesday took a relatively pessimistic view of the budget landscape, telling the National Association of Business Economics he believes the debate over how much of the non-Social Security surplus to allocate to tax cuts or new spending "is likely to be particularly contentious this year. I wish I could tell you how it's going to come out, but it's just too soon to tell."

Domenici again made the case for cutting taxes as a way to return some of the surplus to taxpayers and to prevent the federal government from spending. But he later told reporters that discretionary spending "is going to go up some" in fiscal 2001, in part because of the large increase in defense spending the president has proposed. An additional factor in upping the ante, he conceded, is another emergency supplemental to cover disaster aid, military activities in the Balkans, and more money for financially strapped farmers.

But Domenici also noted both Congress and the president now want to devote a portion of the on-budget surplus to debt reduction, and both have pledged to eliminate the nation's publicly held debt by 2013.

As for using some of it to create a prescription drug benefit for Medicare recipients, Domenici said "the Democrats may, in the final analysis, rather have the issue" to campaign on than to pass legislation-and he "would venture to guess" President Clinton may feel that way, too.