OMB chief: Don't take defense money for education

Office of Management and Budget Director Mitch Daniels Friday told the chairmen and ranking members of the House and Senate Appropriations committees that President Bush does not support diverting any of the $18.4 billion increase he wants in the fiscal 2002 defense budget to beefing up education spending--but sources said Daniels did indicate the administration is open to finding creative ways to provide additional funding for one of the President's signature issues.

Senate Appropriations Committee Chairman Robert Byrd, D-W.Va., said, "As of now, that's the [White House] position--but there has to be give and take on all sides."

Appropriators and the administration are already aware, as are top congressional leaders, that with the dramatically lowered budget surplus estimates for FY01 and FY02, they will be cutting it close to keep the FY02 appropriations process on track while honoring pledges not to "raid" the Social Security trust fund surplus.

After the meeting, Senate Appropriations ranking member Ted Stevens, R-Alaska, declared, "The paradigm is no Social Security trust fund intrusion--and we can do that."

But to do so will take some creative accounting that, in part, will have to make up for roughly $5.3 billion in outlay differences in OMB and Congressional Budget Office scorings of the FY02 numbers, including some funds from the FY01 defense supplemental that CBO scores against FY02 spending, as well as other discrepancies in the defense and mass transit accounts.

House Speaker Dennis Hastert, R-Ill., who was briefed by House Appropriations Chairman Bill Young, R-Fla., after the meeting, indicated there are far more questions than answers right now.

"There are a lot of pieces that you have to move around to make things work," Hastert told CongressDaily, including the defense increase, the final education number, and money for a new farm bill. "Look, you've got two pieces to this--you've got cost and you've got the future," he said.

The goal, Hastert said, is to find a way to make the appropriations accounts add up within the budget while "doing the best we can to grow ourselves out of these doldrums." Asked whether there will be money to pay for Bush's full defense increase, Hastert said, "Right now we assume there is, but we're not sure."

For his part, Byrd continues to focus on moving the FY02 spending bills, and said he asked Daniels for the administration's assistance on that front, since Republicans have held up progress on the Commerce-Justice-State appropriations bill to force the Senate to consider Bush's judicial nominations.

"We've got work to do," Byrd said. "Above all, we should not end up with an omnibus bill, and each day brings us 24 hours closer to the end of the fiscal year." A year-end omnibus, which Byrd said only encourages more spending, "makes us all look bad."

Meanwhile, Senate Majority Leader Tom Daschle, D-S.D., and House Minority Leader Dick Gephardt, D-Mo., both continued their criticisms of the Bush administration over the deteriorated budget situation.

Daschle faulted President Bush's budget and tax cut, and said the prospect of budget deficits has affected financial markets and caused long-term interest rates to remain high, contributing to rising unemployment figures.

Gephardt echoed recent comments by other Democratic leaders by demanding that Bush offer Congress a new plan for a budget that avoids tapping the Social Security surplus. White House officials indicate no such proposal should be expected.