Factions within the Republican party, in West Virginia for their annual retreat, are split over the president's budget, with conservatives grumbling about the expected $100 billion deficit that the president is proposing for fiscal year 2003.

With the economy showing some spark -- fourth quarter numbers rose 0.2 percent and unemployment dropped by 0.2 percent -- Rep. Tom Delay, the House Majority Whip, and several others want a balanced budget.

They say one way to do that is to scrap the economic stimulus proposal that passed the House but stalled in the Senate at the end of last year.  The president asked the Senate to take the bill back up this session, and Senate Majority Leader Tom Daschle, D-S.D., has proposed a compromise deal that is currently under consideration. 

According to one source attending the GOP retreat at Greenbrier resort in West Virginia, during a closed Q & A session Friday, Bush told lawmakers that he is as concerned as they are about fiscal discipline and balancing the budget. He told them that the way to do that is to keep "spending down," which, according to the source, earned him a standing ovation.

Bush also said that he would be willing to use his veto pen to keep spending down, somthing which the president admitted he only "huffed and puffed" about a lot last year, the source said.  Bush said this year, he may "blow the House down... or the Senate."

Conservatives, however, are still interested in removing the stimulus package from the mix, and may be permitted by the House leadership to propose an alternative budget in order to demonstrate the fiscal discipline on which they campaign.

Fox News' Jim Mills contributed to this report.

Carl Cameron currently serves as Fox News Channel's (FNC) Washington-based chief political correspondent. He joined FNC in 1996 as a correspondent.