Partisan sparring suggests long, heated budget season

Senate budget writers previewed Tuesday the jousting ahead over taxes and spending in what bodes to be a contentious election-year season.

With Congressional Budget Office Director Douglas Holtz-Eakin in the spotlight, the Senate Budget Committee renewed arguments over the economic impact of federal deficits and the failure of the recovering economy to produce enough jobs to make up for the nearly 3 million workers left jobless by the three-year economic slowdown.

Holtz-Eakin laid out CBO's projections over the next decade for anticipated revenues and expenditures and predicted a $2.4 trillion addition to the national debt over the next 10 years. The deficit this year alone, he estimated, would reach $477 billion, the highest ever.

Democrats, led by Budget ranking member Kent Conrad of North Dakota, called the mounting deficits a serious threat to the nation's economic growth. He blamed President Bush's tax cuts over the last three years for contributing not only to the debt problem but also to shortchanging domestic needs.

"We face an unending flood of red ink," Conrad said. "Revenue as a share of our gross domestic product will reach its lowest level since 1950, so we've got a serious revenue problem."

Republicans countered that the debt, as a share of GDP, is manageable, and they appeared largely to support the president's intention to hold non-defense discretionary spending to a 1 percent rate of growth.

Budget Committee Chairman Don Nickles, R-Okla., defended the tax cuts as a powerful stimulus to the emerging economic recovery and said the stock market alone had added $4 trillion in value in the past year, giving a healthy shot of capital to businesses. Revenue losses, Nickles said, could not be blamed on the tax cuts but on the economic slowdown.

Meanwhile, Senate Appropriations Committee Chairman Ted Stevens, R-Alaska, said Republicans will need Democratic votes for any budget resolution to give them "cover" for some things they want to do. But Stevens predicted a tough appropriations year, saying he did not expect more than three appropriations bill to pass before September, listing the Defense, Homeland Security and Military Construction spending bills as the most likely ones.