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Senate Approves Spending Bill, Previewing Fight

July 11, 2001|JANET HOOK and PAUL RICHTER | TIMES STAFF WRITERS

WASHINGTON — Amid signs the federal budget surplus is dwindling, the Senate on Tuesday approved a midyear appropriation bill that tested its resolve to control spending and stick with President Bush's big tax cut.

Proponents of the bill, which includes $300 million more to help the poor pay their energy bills, fended off most efforts to add other large sums to the bill--including a proposal by Sen. John McCain (R-Ariz.) to increase defense spending by $847 million.

But the Senate accepted other amendments serving lawmakers' home-state interests--including a provision to block plans to reduce the B-1 bomber fleet.

That amendment was championed by senators from three states where the plane is stationed. And the action bodes ill for Bush's defense reform campaign, because plans to reduce the B-1 fleet had been held out as an example of how the Pentagon could make judicious cuts to finance a reshaping of the armed forces.

The overall bill, which passed 98 to 1, would provide $6.5 billion to meet unanticipated government costs. A similar bill has passed the House. A final bill is expected to be sent to Bush quickly, after minor differences between the two versions are worked out.

Senate debate on the spending measure provided a window onto the kinds of pressures that threaten efforts to keep the federal budget in the black: Congress is expected to contend all year with similar efforts to increase spending for defense, social programs and home-state projects.

The debate also previewed what is likely to be a yearlong scramble between the parties to affix blame if the budget lapses back into deficit or if Congress returns to the practice of dipping into Social Security and Medicare reserves to finance other programs.

Democrats argued that the driving force behind the potential revenue shortfall is not excessive spending but enactment of Bush's 10-year, $1.35-trillion tax cut. But in a sign of how hard it will be to undo the tax cut, an amendment to rescind the rebate checks to be sent soon to those who pay income taxes was rejected, 94 to 3.

Still, the Bush administration and its GOP allies mounted a counteroffensive to argue that the tax cut has helped--not hurt--the budget. They said projected revenue would be even smaller if the tax cut had not been enacted to stimulate the flagging economy.

"The reason we're not going to have more pain . . . is because of the timing and the wisdom of going forward with that tax cut when we did," Vice President Dick Cheney said after meeting with Senate Republicans on Tuesday.

The supplemental spending bill provides $5.9 billion for the Pentagon and other national security programs, including money for increased energy costs.

It also provides the additional $300 million for the Low-Income Home Energy Assistance Program, a 21% increase in the $1.4-billion program that helps the poor pay heating and air conditioning costs that have soared for many in California and elsewhere.

The bill's sponsors, seeking to keep its total price tag at the $6.5 billion requested by Bush, blocked an amendment to add an additional $150 million for energy assistance for the poor. The vote was 77 to 22.

In the Senate, the bill also became a vehicle for a broader budget debate, coming at a time when economists and government officials are projecting that this year's budget surplus will be smaller than expected. Democrats spotlighted their argument that Bush's tax and budget policies had taken so much from the surplus that the Medicare trust funds will have to be tapped to pay for other programs this year. Republicans denied that was the case.

The McCain amendment to add $847 million for defense was defeated, 83 to 16.

McCain argued that more money was needed to maintain military readiness and an adequate standard of living for military personnel. He proposed offsetting cuts in an array of other programs, including subsidies for job training and for security at the Olympic Games in Salt Lake City.

He met opposition from lawmakers who objected to those offsets and others who said that additional Pentagon funding would be better provided after the agency finished its pending review of the nation's defense needs.

While beating back those high-visibility challenges to the bill, its sponsors more quietly accepted add-ons for home-state projects for key lawmakers. Buried in the last amendment to the measure, for example, was $24 million to help repair ice storm damage in Arkansas--home state of Sen. Tim Hutchison, a Republican who faces a tough fight for reelection in 2002.

California got its share as well. At the insistence of Sen. Dianne Feinstein (D-Calif.), $20 million was added to help farmers in the Klamath Basin, on the California and Oregon border. Farmers there have been facing a drought, but the water available for irrigation has been reduced by federal officials to protect endangered fish species.

And a provision pushed by Sen. Barbara Boxer (D-Calif.) added $1.4 million to combat a disease afflicting California oak trees.

The provision blocking reduction of the B-1 bomber fleet was included at the last minute at the urging of senators from Kansas, Idaho and Georgia.

Secretary of Defense Donald H. Rumsfeld had proposed cutting the B-1 fleet from 96 to 60 to raise $165 million in savings that could be used to upgrade the remaining planes.

Critics of the move urged that the Senate allow no money to be spent on reducing the B-1 force until Oct. 1, at the earliest, to allow for a more careful review of the effects on reserve military personnel at bases in the three states affected by the cutback.

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