Conservatives seeking ways to limit spending growth

Although the nascent debate over the size and scope of tax cuts has seized most of the budget spotlight, a more low-key, but no less serious, debate over appropriate discretionary spending levels and how to control Congress' appetite for spending is also under way. Several key Republicans, including Senate Budget Chairman Pete Domenici, R-N.M., are prepared to allow the fiscal year 2002 appropriations level to grow at the rate of inflation. Domenici has argued that with the Congressional Budget Office projecting a 10-year non-Social Security surplus of $3.1 trillion, there is more than enough surplus to cover the $1.6 trillion tax cut package offered by President Bush. But Democrats such as Senate Budget ranking member Kent Conrad, D-N.D., and House Budget ranking member John Spratt, D- S.C., say spending should grow faster than inflation to account for other factors--such as population increases, as well as the numerous domestic and defense spending initiatives the President and Republicans say they want to enact. Democrats also said the Medicare Part A trust fund surpluses, which CBO projects at $400 million over the next 10 years, ought to be taken off budget--thereby reducing the 10-year on-budget surplus to $2.7 trillion. Adding the cost of higher interest payments on the national debt to the cost of the Bush tax cut would bring the Bush plan up to $2 trillion, and with alternative minimum tax relief factored in, Democrats say the Bush plan would amount to $2.2 trillion. That uses most of the $2.7 trillion surplus funds Democrats say ought to be used for tax cuts and spending. Last year, Senate Budget Committee hard liners held up work on the annual budget resolution in order to install several procedural mechanisms to restrain discretionary spending. Although the fiscal 2001 budget set the total appropriations level at $600.2 billion, therefore allowing spending to grow at less than the inflation rate, CBO estimates Congress ended up appropriating $637 billion in fiscal 2001. Nevertheless, Domenici and spending hawks Sens. Phil Gramm, R-Texas, and Judd Gregg, R-N.H., the latter a senior Budget panel member, have indicated they support using an inflated baseline this year. CBO's inflation-adjusted baseline would set total discretionary spending at $665 billion in fiscal 2002. But accepting an inflated baseline does not mean Budget Committee spendthrifts are prepared to let go of fiscal restraint. To the contrary, Gregg is looking for enforceable ways to limit spending to the number the budget resolution sets out. Specifically, Gregg wants to create a mechanism, as he described in a recent hearing, to limit discretionary spending growth "to some percentage of the rate of growth of the economy, say 60 percent, with some enforcement mechanisms." Gregg also wants to create a mechanism to ensure that spending and tax cut policy are adjusted if economic circumstances change so as to ensure what he called "the ultimate goal of debt reduction." Gregg said he is working with committee Democrats and hopes to offer a bipartisan amendment at the budget resolution markup.