After Bailouts, Stimulus Packages, Is It Time for a Federal Budget Diet?

Congress has yet to pass a budget for the current fiscal year, which ends Sept. 30, and Democratic leaders now are scrambling to get enough votes to pass a $410 billion spending bill to bridge the gap.

But with the federal deficit widening from economic relief efforts, would it be better to pass no bill at all and simply let the government reap the savings of continuing to operate at 2008 spending levels?

Such a scenario is hardly out of the question. The so-called omnibus bill, which would award spending increases to domestic agencies for the rest of the fiscal year, also contains money for about 8,000 pet projects sought by lawmakers. But progress on the bill ground to a unexpected halt this week in the Senate, forcing lawmakers to rush through stopgap legislation Friday that maintains 2008 spending levels for most departments for another five days.

Steve Ellis, vice president of Taxpayers for Common Sense, told that holding the line on regular government spending would hardly be felt.

"It would have less impact this year because of the stimulus money," he said, referring to the $787 economic stimulus package that President Obama signed last month. Many agencies are getting additional funding from that package, he noted.

After the government delivered more bad economic news on Friday -- a spike in unemployment to 8.1 percent -- the top House Republican called for a freeze on spending until the end of the fiscal year and pleaded with Obama to veto the Senate measure.

House Minority Leader John Boehner, R-Ohio, said the bill is loaded with "unscrutinized taxpayer-funded earmarks" that are "a textbook example of why Americans have grown so fed up with Washington."

But Ellis said the rationale for a spending freeze is weak, given that the stimulus package was passed and follows a Keynesian model of economics that advocates for increased government spending during a recession.

Ellis said his group is not in favor of spending freezes in general because they fail to root out government waste.

"I'm not being dismissive of Minority Leader Boehner's approach," Ellis said. "That's certainly a tool. But we need to have a smart tool" to cut government waste.

Ellis said the only way the spending bill would fail is if one of the amendments proposed in the Senate succeeds, because he doubts the House would vote again on the measure.

House Speaker Nancy Pelosi, D-Calif., privately threatened to abandon the bill altogether Thursday night, infuriated that GOP leaders were stalling it even though they helped craft it and have a big stake in its passage, according to a Democratic leadership aide. The aide demanded anonymity to speak frankly about a private meeting.

If the larger spending bill ends up being amended by the Senate, the House would again have to act on that bill, giving Republicans more chances to launch political attacks.

Senate Democratic leaders prevailed upon Pelosi to stick with the measure for now. Letting it die would deny large spending increases for some of Democrats' favorite programs, such as food aid for children and pregnant women, in addition to billions of dollars for lawmakers' pet projects.

The measure was written mostly over the course of last year, before projected deficits quadrupled and Obama's economic recovery bill left many of the same spending accounts swimming in cash. Initially, the bill attracted bipartisan support, but most Republicans developed sticker shock in the wake of enactment of the $787 billion economic stimulus bill.

And, to the embarrassment of Obama -- who promised during last year's campaign to force Congress to curb its pork-barrel ways -- the bill contains 7,991 pet projects totaling $5.5 billion, according to calculations by the GOP staff of the House Appropriations Committee.

The Associated Press contributed to this report.