A Bush Budget Showdown Brewing

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Christopher Morris / VII for TIME

President George W. Bush

How serious is President Bush about his sudden return to the altar of fiscal responsibility?

Over the past two weeks, Bush and Congressional Republicans alike have hammered Democrats on excessive spending and earmark abuse. With both the President and Congress's approval ratings at record lows and typically stalwart conservatives criticizing Bush over his perceived support of "amnesty" for illegal immigrants, Republicans have fallen back on their old favorite agenda — starve the beast that is the federal government.

Two weeks ago, House Republicans stalled the homeland security appropriations bill — one of 12 that must be passed each year to provide funding for the federal government — over a dispute concerning earmarks, those sneaky provisions lawmakers place into bills that typically allot funds for projects in their home districts. Bush, in his June 16 radio address, also focused on earmarks — and referred to the Democrats with that old-school label: "tax-and-spend." Most significantly, Bush has vowed to veto any appropriations bill that comes in above the amount he has specifically asked for. That's most of them. Come late summer or early fall, a showdown between the President and Congress could be in the cards.

Democrats are predictably skeptical of the party's recent "spend wisely" hosannas. "It's a miracle," says Wisconsin Rep. David Obey, sarcastically. "It's a St. Paul conversion on the road to Damascus." Obey, chairman of the House appropriations committee, was the architect of a plan to keep earmarks secret until the appropriations bills passed both houses, at which point they would be all but impossible to remove individually via votes on the house floor, as traditionally has been the case. Republicans were outraged at the maneuver and, sensing an opportunity, called out their opponents for a lack of transparency and dragged out debate until Obey was forced to give in, scuttling the Democrat plan to pass the majority of appropriations bills before July 4.

In those bills, Congress plans to appropriate about $22 billion more than the $933 billion that Bush submitted in his budget for fiscal year 2008 (itself a $60 billion increase over FY 2007). That $22 billion overage — a mere 2.4% of the President's proposed budget — is the basis on which the President and his advisors plan their vetoes. Furthermore, says James Horney, director of federal fiscal policy at the Center for Budget and Policy Priorities, the number in dispute is actually closer to $5 billion, since Bush's budget request cuts over $16 billion from current domestic programs. "Clearly, from a fiscal standpoint, this is all a sideshow," says Horney. "At the end of the day, we're talking about very modest amounts of money here."

House Majority Leader Steny Hoyer, a Maryland Democrat, also sees Bush's threats as a sign that the President, despite his weak numbers, still has ways to flex his muscles. "Remember what Bill Clinton said after the 1994 election? 'I'm not irrelevant," says Hoyer. "The reality is that the President does have a big stick — the veto — so he's not irrelevant at all." The fact that Bush has executed his veto power only three times in six years (none of them on spending bills), makes his threats even more serious. Hoyer pointed to a letter signed by 147 House Republicans as of June 13 vowing to sustain the President's veto as evidence of a concerted party effort to re-cloak themselves with the mantle of fiscal responsibility. "They signed that letter without even knowing what the numbers in the final bills are going to look like," Hoyer said. "It's demagoguery."

Not so, says Brian Kennedy, spokesman for House Minority Leader John Boehner, an Ohio Republican. "This is a warning shot across the Democrats' bow," Kennedy says. "If you allow yourselves to spend willy-nilly, you're going to run the risk of facing a veto, and our numbers demonstrate that we have the ability and intention of sustaining that veto." That bravado, however, is also coupled with the begrudging realization that Republicans lost their majority last fall because of the perception that they were fiscally irresponsible. "The Republican leader has said any number of times that we need to earn our way back into the majority," Kennedy said. "Part of that process is making sure that we polish our credentials on fiscal discipline."

It's not clear that the White House is ready to match its rhetoric with action. Some observers have suggested that outgoing budget director Rob Portman resigned unexpectedly last week because he doubted the Administration's commitment to fighting Congress' proposal to boost spending on veterans' medical care.

Still Portman's replacement, Jim Nussle, former chair of the House Budget committee, is expected to take a hard-line approach. Many Democrats view him as a particularly combative foe who could push for a standoff after Congress sends its spending bills to the President's desk. "They've put the guy in charge who is the Congressional architect of this mess," says Rep. Obey of Nussle. "To me that is a recipe for confrontation."