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Budget Faces Collision Course

Several House GOP sources said the White House has sent word that it will not request an emergency spending bill this year, barring a terrorist attack or unforeseen crisis.

While the Bush administration will be delivering its official budget proposal next month, officials are vowing not to come back for extra money — even for post-war Iraq —before the November elections. Administration officials had assured Congressional leaders of as much when they made a full-court press for an $87 billion emergency supplemental last year.

“The administration has come to the conclusion that they do not plan to send another supplemental this calendar year,” said a senior House Republican.

In the wake of the broad policy agenda that President Bush outlined in Tuesday night’s State of the Union address, House Republicans are now girding themselves for a budget season in which election-year pressures and their desire to restrain spending are sure to collide.

Even without the added expense of a supplemental, GOP lawmakers will have a tough time reconciling two competing pressures within their Conference.

As occurs every two years, the coming election season will bring with it calls to increase spending on politically popular programs. At the same time, discomfort with mounting deficits appears to have reached a tipping point, as GOP lawmakers have grown tired of having their record on spending eviscerated by conservative think tanks and editorial pages.

“It may be that neither wins and that in fact there is a stalemate,” said House Budget Chairman Jim Nussle (R-Iowa). “It’s possible that neither side carries the day. I’m on the side that says it is good politics in this instance to control spending.”

On Tuesday, Bush called for making previously passed tax cuts permanent, an increase in spending for select programs and a commitment to reduce the deficit. The White House is scheduled to send its budget proposal to Capitol Hill on Feb. 2.

Nussle said that while he applauded the president’s agenda, he is eager to see the details before passing judgment on their viability.

“I hope he’ll outline for us how he’s going to pay for these items,” Nussle said.

In 2003, Nussle pushed for more Draconian spending targets and was rebuffed by the Republican leadership. This year, leaders are hearing increased concern about deficits from rank-and-file Members and from their constituents.

“It’s understood by Members as a whole that we need to work on the deficit,” said Chief Deputy Majority Whip Eric Cantor (R-Va.). “The issue is, in an election year, can we deliver as fiscal conservatives a budget that cuts spending?”

Rep. Rob Portman (R-Ohio), the Elected Leadership chairman, expressed confidence that spending could be controlled to the point that Bush’s deficit-reduction goals are met.

“I think there is enough concern out there about restraining spending that it will overcome normal election-year budget increases,” he said.

But, Portman cautioned, “It’s harder politically than it is policy-wise. The Senate’s going to be a challenge.”

The real political fight will come not during the budget process but rather during the appropriations season, when the House and Senate square off and many self-proclaimed fiscal conservatives fight to protect their own projects. Even now, the Senate is still trying to wrap up last year’s process.

“I think we’re going to be wearing two hats on only one head,” said Jim Dyer, staff director for the House Appropriations Committee. “In election years there is a lot of Member pressure to do some specific things to help them get re-elected.”

Because Members have their own favorite programs, the Bush administration likely will not get all of its own initiatives funded, even if it does get its desired budget numbers.

“I do think that they’re not going to be able to produce a document that exceeds the president’s budget,” Dyer said of the Budget Committee. “You may have a document that does some priority rearrangement.”

With increased spending on defense and homeland security and a massive highway bill on tap, additional tax reductions could become less likely.

“There are some areas where it will be difficult in finding the balance between the administration and Congress,” said Rep. David Hobson (R-Ohio), a senior member of the Appropriations panel. “It’s going to be interesting to see whether you cut taxes anymore.”

While non-defense spending will be the main arena for conflict, there will also be pressure to further boost military funding.

“I just think that for the defense piece, we’re still at less than 4 percent of the GDP,” said House Armed Services Chairman Duncan Hunter (R-Calif.), who noted that defense spending under former Presidents Ronald Reagan and John F. Kennedy was at dramatically higher levels when compared to the total size of the economy during their time in office.

Hunter and other defense hawks are seeking at least $20 billion in additional funds for the Pentagon next year.

But the California Republican remains committed to additional tax cuts as well, and is not worried that such cuts will force deficit spending.

“The economy is coming along,” insisted Hunter. “The revenues will be there.”

John Bresnahan contributed to this report.

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