Key lawmakers hedging their bets on Defense increase

Before leaving for the August recess, key defense and budget policymakers were hedging their bets on the fate of the President's fiscal 2002 Defense appropriations increase--although all said they could not make any decisions until after the Congressional Budget Office and the Office of Management and Budget release their mid-session budget forecasts. The updated surplus projections will reveal pivotal information about how large a surplus is expected outside of Social Security, as well as how much of the so-called on-budget surplus is in the Medicare trust fund. Members of both parties have said the Medicare trust fund should be off limits, except for Medicare spending. Earlier this summer, President Bush requested an $18.4 billion increase to the $310.5 billion he initially asked for in his fiscal 2002 budget, even though Defense Secretary Donald Rumsfeld has yet to complete a strategic review to justify the increase. Anticipating that Bush would amplify his initial defense request as a result of Rumsfeld's review, this year's budget resolution empowers the Budget panel chairmen to raise the fiscal 2002 Defense spending bill amounts "in response to the recommendations of the President's national defense review." But the resolution also states that doing so "may not reduce the on-budget surplus below the level of the Medicare Hospital Insurance Trust Fund surplus." Concerned the mid-session numbers could show there is little or no budget surplus outside of the Medicare trust fund, Senate Budget Committee Chairman Kent Conrad, D-N.D., last week reiterated his position that the defense increase must be paid for and called on the White House to propose offsets. Conrad said his hands are effectively tied when it comes to providing the extra money for defense. "I can't raise [the defense allocation] if we are using Medicare trust fund money" to pay for it, he said. But he added, "Obviously, 60 votes" could overrule his determination. If it were to come to that, however, Conrad said he "would not be one of the 60." House Budget Committee Chairman Jim Nussle, R-Iowa, did not disclose how he would react, saying he is "not going to make any decisions until I see what the mid-session review determines." Unlike Conrad, Nussle has not called for offsets to pay for the increase. In contrast to the Budget panel chairmen, House Defense Appropriations Subcommittee Chairman Jerry Lewis, R- Calif., was defiantly optimistic about the prospects for getting the full defense increase. Lewis rejected the conventional wisdom that the mid-session numbers will be bad, saying, "What if they're better than expected?" Regardless, Lewis said he "will go to the wall if someone wants to cut us back" from the extra $18.4 billion Bush requested. Lewis said he knows the budgetary situation will be tight in September, and that some number crunching will be in order. "I think we'll have to apply all the capable imaginations we can find around here to meet the outlay targets," he said. "It will be difficult." But in the final analysis, many believe the Pentagon will get everything it asks for, even with lower surplus projections. Said one GOP member: "It doesn't matter what's in the Defense [appropriations] bill. It will pass."