OMB defends budget priorities before congressional skeptics

Office of Management and Budget Director Mitch Daniels Tuesday offered a vigorous defense of the $2.13 trillion budget before the Senate Budget Committee Tuesday, where Budget Chairman Kent Conrad, D-N.D., and panel Democrats proved a skeptical audience.

Republicans, led by Budget ranking member Pete Domenici of New Mexico, heartily endorsed Bush's budget priorities and challenged the majority to come up with a better plan if they disagreed.

Conrad reiterated his opposition to the long-term fiscal priorities of Bush's budget, which OMB projects will run a 10-year non-Social Security deficit of $1.5 trillion.

"What we see is an ocean of red ink" that would use roughly $2 trillion of the Social Security and Medicare trust fund surpluses to pay for tax cuts and other government programs rather than to reduce the publicly held debt and reform those entitlements, Conrad said.

Nevertheless, Conrad said he and fellow Democrats "don't have much disagreement" with the deficit-spending plan Bush proposed Monday for 2003--which, including $65 billion for an economic stimulus, would run an $80 billion total budget deficit in order to boost defense and homeland security spending.

Daniels said Bush's budget is meant to fight "a two-front war" on terrorism and recession, and that, under other circumstances, balancing the budget and using on-budget surpluses to pay down debt would be top priorities.

"We look forward to resumption of that goal as soon as possible," he said.

Daniels came under fire from several Democrats for various proposals, among them the $9 billion cut to transportation programs necessitated by the statutory funding formula, funding for cleanup of the Hanford nuclear reservation, and the $10 billion emergency reserve fund for unspecified 2003 war expenses.

Daniels also rejected the idea--favored by Conrad and Sen. Olympia Snowe, R-Maine, among others--to adopt a trigger to tie future spending increases and tax cuts to debt reduction targets. Daniels said a trigger "would deliver the wrong medicine at the wrong time" by short-circuiting tax cuts during an economic slowdown.