Senate budget chair says 4 percent spending increase not enough

Senate Budget Committee Chairman Pete Domenici, R-N.M., Friday told Office of Management and Budget Director Mitchell Daniels point blank that he does not believe the 4 percent annual growth rate in federal spending that President Bush has proposed for fiscal 2002 will be enough to meet the nation's needs.

Domenici, also a senior member of the Appropriations Committee and chairman of the Energy and Water Appropriations Subcommittee, opened today's hearing by saying, "There may be some areas, especially in the area of the appropriated accounts, where this one senator may have some different emphasis than the President as we move through the process."

Domenici hastened to add, "But I am equally certain that, in the end, the principles outlined by the President will guide the final legislative decisions we make."

Domenici later told Daniels: "You could be off some on your appropriated accounts, in terms of what we need to do. The truth is that 4 percent may not be adequate." But he pledged to work with the administration over the course of the appropriations process.

Bush's budget calls for discretionary spending to increase to $660.7 billion in budget authority for FY02, up from $635 billion in FY01; the inflation-adjusted spending baseline that CBO released in January would set the discretionary appropriations level for FY02 at $665 billion in budget authority.

Following the hearing, Domenici told reporters he has not yet decided what he believes the right FY02 spending level should be, saying: "I don't know whether it should be 4.5 percent, 5 percent. But from what I have seen, I don't think we can live with 4 percent."

While Bush is proposing an average growth rate of 4 percent, certain favored accounts would enjoy considerably larger increases, while others would necessarily have to absorb cuts from current levels to make up the difference.

Domenici told reporters, "Some functions of government just can't take as big a cut as they're talking about," and cited transportation.

Although Bush proposes to fully fund the highway, mass transit and aviation trust funds at the statutorily required levels, he would cut the Transportation Department's budget from $18.4 billion in FY01 to $16.3 billion in FY02, an 11.4 percent decline.

Bush's budget also would cut the Army Corps of Engineers' budget from $4.5 billion in FY01 to $3.9 billion in FY02, a 13.3 percent drop; HUD from $35.3 billion to $34.1 billion, a decrease of 3.4 percent; and the Energy Department from $19.7 billion to $19 billion, a 3.6 percent decline.