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President Bush Pushes Balanced Budget On Cautious Democrats January 4, 2007

Posted by notapundit in Congress, Politics, US News, White House.
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WASHINGTON (AP)–President George W. Bush is challenging Democrats as they take control of Congress to join him in balancing the budget within five years and to cut thousands of pet projects from future spending bills.

Top Democrats reacted cautiously or not at all to Bush’s comment, which assumes Congress will renew tax rate cuts passed in 2001 by a Republican-controlled Congress and maintain tax cuts on investments, inheritances and many other items.

“We welcome the president’s newfound commitment to a balanced budget, but his comments make us wary,” incoming House Budget Chairman John Spratt, D-S.C., said. “They suggest that his budget will still embody the policies that led to the largest deficits in history.”

Democrats have attacked Bush’s tax agenda as being tilted in favor of upper-income taxpayers and contend that at least some of the cuts need to be rolled back to be able to reach a broader agreement on the budget.

But White House officials and lawmakers such as Spratt see at least a chance for Bush and his longtime Democratic rivals to come together on the budget. For starters, coming projections of tax revenues will show continued improvement, which could make it easier to bring the budget to balance by 2012, Bush’s target year.

“We face a spending problem, not a revenue problem,” said White House Budget chief Rob Portman. “We’re not undertaxed right now.”

Neither Nancy Pelosi, D-Calif., speaker of the House of Representatives under the Democrats, nor incoming Senate Majority Leader Harry Reid, D-Nev., responded to Bush’s remarks.

Meanwhile, House Democrats are prepared to enact modest changes to the much-maligned practice of “earmarking” home district projects in spending bills but will fall short of several steps Bush proposed Wednesday.

The Democratic changes would extend a Republican-passed rule to require names of lawmakers who sponsor earmarks to be listed in reports accompanying spending bills, and Democrats have announced a one-year moratorium on lawmakers’ pet projects as they clean up $463 billion worth of unfinished spending bills for the current 2007 budget year that began Oct. 1.

Bush went further, saying Democrats should change earmark rules to require “full disclosure of the sponsors, the costs, the recipients and the justifications for every earmark,” and after the current moratorium, the cost of earmarks should be cut in half from 2006 levels of more than $16 billion.

Democrats also will try to reimpose a rule that would require tax cuts or new spending on benefit programs such as Medicare to be accompanied by revenue increases or tax cuts elsewhere in the budget. The rule could be waived easily, however.

While the initial work of the Democratic Congress will focus on ethics reform and a variety of Democratic priorities such as raising the minimum wage, a flurry of difficult but must-do budget work looms, including:

-A $100 billion-plus request to pay for military operations in Iraq and Afghanistan, to be submitted with Bush’s Feb. 5 budget. While Democrats promise greater scrutiny of Bush’s request, it is expected to pass largely as submitted since lawmakers are loath to interfere with money to protect overseas troops.

-A massive $463 billion or so catchall spending bill to wrap together nine unfinished appropriations for the current budget year. They would finance budgets of every Cabinet agency, which in many cases would be frozen at last year’s levels, although difficult work remains to determine which accounts – such as veterans medical programs – should receive increases to avoid shortfalls and layoffs of federal workers.

-A congressional budget measure to set targets for tax revenues, spending on so-called entitlements such as Social Security and Medicare and caps on the annual appropriations bills. If Bush and his Democratic rivals make a good-faith effort to work together to balance the budget, this measure would serve as a blueprint for compromise.

That still appears to be a long shot, given the rancorous history between Bush and Democrats, who say the president has to show flexibility on taxes if they are going to take on tough issues such as spiraling health care and federal pension costs.

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