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House GOP Asks for Big Cuts in Spending

The plan to fight deficit seeks to pay for Bush's tax cuts. Senate version is smaller in scope.

March 13, 2003|From Reuters

WASHINGTON — House Republicans on Wednesday proposed deep cuts in federal spending to fight rising budget deficits and pay for new tax cuts requested by President Bush.

The plan would slash spending by about $570 billion more than Bush proposed over the next decade, while including most of the $1.6 trillion in tax cuts he is seeking.

Senate Republicans later hewed closer to Bush's budget proposals when they rolled out their own spending blueprint. The two plans will have to be reconciled before Congress adopts a final budget, likely in April.

The Congressional Budget Office forecast last week that Bush's proposals would swell federal budget shortfalls by $2.7 trillion over the next decade, generating deficits every year and turning an $890-billion surplus into a $1.82-trillion deficit.

Faced with that grim outlook, House Republicans vowed to bring their own budget back into balance by 2010 by targeting "waste, fraud and abuse" in government programs. The White House has generally sought to play down the impact of the predicted deficits, calling them moderate and manageable.

"I don't like deficits, I don't want deficits, and I will not pretend that deficits don't matter," said House Budget Committee Chairman Jim Nussle, an Iowa Republican.

The proposed spending cuts would fall on all government programs except Social Security, unemployment insurance, homeland defense and the military. "In every other area, we should be looking for ways to tighten Washington's belt," Nussle said.

Both the House and Senate budgets will also include about $1.3 trillion for Bush's new tax cuts over the next decade, as well as $400 billion the White House wants to overhaul Medicare.

Both would also generate deficits of well more than $300 billion in 2004, eclipsing the 1992 record of $290 billion in dollar terms.

Over the next decade, the Senate plan assumes a total deficit of $1.35 trillion, while the more aggressive House plan would still generate a cumulative shortfall of $760 billion.

Republicans say tax cuts will help jolt the economy, boost government revenue and eventually shrink the deficits.

Democrats argue it was Bush's last tax cut package in 2001 that started the steep recent slide in the U.S. fiscal position. They said the tax cuts would have to shrink too if a real effort was to be made to deal with the deficit problem.

"If Republicans are serious about enacting these draconian spending cuts, they will be balancing their tax cuts on the backs of working families," said South Carolina Rep. John M. Spratt Jr., the ranking Democrat on the House Budget Committee.

Republican leaders have indicated they will focus this year on trying to pass the $726-billion portion of the larger tax package that Bush says would give an immediate shot in the arm to the anemic U.S. economy.

But the gloomy fiscal outlook makes even that a tough sell. Republican moderates in the closely divided Senate are scheduled to meet today to try to reach consensus on shrinking the growth package, possibly to about $350 billion.

Lawmakers on both sides of the aisle also have expressed unease at proceeding with the budget process without any clear idea of the potential cost of a possible war with Iraq -- which some estimates have put close to $100 billion.

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