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Daniels Calls Federal Deficits Unavoidable in Wednesday Testimony

Mitch Daniels, director of the White House Office of Management and Budget, tried to defuse criticism of the large deficit spending projected in the 2004 budget when he testified before the Ways and Means Committee on Wednesday.

Arguing that current federal deficits are the unavoidable consequence of the recession and a “popped revenue bubble,” Daniels said the fiscal 2003 deficit would have been $170 billion even without the 2001 tax cut. He also called unfunded entitlement programs such as Social Security and Medicare the “real fiscal danger facing our republic.”

Criticism from committee members focused on the administration’s plans for Medicare and Social Security, skipping over spending for defense and homeland security. Rep. Pete Stark (D-Calif.) launched the most vehement objection, accusing Daniels of “trumping up the danger in Iraq, and also trumping up [Medicare cost projections]” for using a 75-year projection that excluded revenues.

Republican members also expressed concern about the budget priorities. Rep. Amo Houghton (R-N.Y.) cautioned that there have been only six years of budget surplus since 1962, while Rep. Jim McCrery (R-La.) objected to “people trying to scare our seniors.”

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