House GOP Plan Would Balance Budget in Seven Years

WASHINGTON – The House Budget Committee chairman proposed a plan Wednesday to balance the budget in seven years while saving $470 billion over the next decade from benefits like Medicare.

Rep. Jim Nussle's blueprint represents a far more aggressive attack on deficits than President Bush has sought.

Across the Capitol, Senate Budget Committee Chairman Don Nickles, R-Okla., prepared to present a plan for ending deficits in 10 years to his panel as well, said a GOP Senate aide speaking on condition of anonymity. Final votes there were not expected until Thursday.

While putting the Pentagon on a path for massive increases over the next several years, Nussle's fiscal plan would hold non-defense programs financed annually by Congress to a scant 0.4 percent growth next year -- to $375 billion -- a $1.6 billion increase.

And since part of those non-defense programs includes domestic security efforts like the new Department of Homeland Security -- which is sure to get big increases -- that meant there would be little extra left over for other needs, such as environmental, farm and school programs.

"I will not pretend that deficits don't matter," Nussle, R-Iowa, declared as debate in the House began.

That was a stark contrast to comments that Bush administration officials have made in recent weeks, seeking to minimize the seriousness of a string of projected deficits that are expected to set new records, exceeding $300 billion annually.

It also underscored an insistence by many lawmakers of both parties that the forecast shortfalls be addressed. Bush's budget would produce an uninterrupted 10-year string of deficits, which White House officials say are a lesser priority than battling terrorism and reviving the economy.

While saying Nussle was right to combat deficits, the committee's top Democrat, Rep. John Spratt of South Carolina, said the tax cuts were excessive and predicted that Congress would never make many of the proposed spending cuts.

"We're a long way apart on this budget resolution this year," Spratt said.

Congress' budget sets overall revenue and spending targets, with decisions about details and actual changes enacted in later bills.

Nussle was hoping his committee would approve his proposal by evening. Democrats said the spending cuts in his plan were too deep and its tax cuts too large, and even some Republicans were leery of Nussle's proposals to cull savings from popular benefit programs.

Nussle's and Nickles' deficit-cutting plans were part of largely similar $2.2 trillion budgets for 2004 that the House and Senate will consider and ultimately combine into a single package.

As another top priority, both the House and Senate budgets would pave the way for Bush's economic growth proposal, a $726 billion package for the next decade dominated by tax cuts, including ending the levy on corporate dividends.

Bush's $726 billion economic plan is expected to shrink because some moderate senators of both parties prefer a package of about $350 billion. Senate Republicans have a slim 51-48 majority, plus a Democratic-leaning independent, and will need moderates' support to prevail.

Bush's economic growth plan would eliminate taxes on corporate dividends and accelerate some already scheduled personal income tax reductions.

Both budget outlines also included most of the rest of the $1.57 trillion in 10-year tax cuts that Bush has proposed, though the rest of his tax reductions are unlikely to become law this year.

Fourteen other congressional committees would have to decide in coming months which programs they oversee would be hit for savings. But the way the numbers were distributed, it was clear that Medicare and Medicaid -- the health insurance programs for the elderly and poor -- would all but certainly be among the targets.

That was drawing objections from some members of the House Ways and Means Committee, which controls Medicare.

Both the House and Senate plans would provide Medicare with the extra $400 billion over the next decade that Bush has proposed to provide prescription drug coverage.

Nussle said his proposed savings would exempt only Social Security, unemployment benefits, the military and domestic security.

The budget committees began their work days after the nonpartisan Congressional Budget Office projected that Bush's budget would produce an accumulated $1.82 trillion in deficits over the next decade.

That excluded the costs of a possible war against Iraq, which could exceed $100 billion, including the expenses of a U.S. occupation and other postwar activities.