REDSAILSINTHESUNSET
September3,2003
President Bush and Congress returned from a month-long vacation, presumably re-energized for what is shaping up to be a contentious battle over a host of high-profile issues, including a prescription drug benefit for seniors and 13 federal spending bills.
August in a virtually deserted Washington was consumed with the usual hard news stories: Will the Washington Redskins make the playoffs? Will construction on the Beltway ever end? Does dark chocolate really increase antioxidant levels?
But just before Labor Day the Congressional Budget Office managed to jolt everyone back to reality with a report that the federal government will post a record $480 billion deficit next year, and accumulate nearly $1.4 trillion in new debt over the next decade. And if the president succeeds in making his tax cuts permanent-adding $1.6 billion to the federal debt-CBO predicts that the government will run in the red for years to come.
Should the cost of fighting in Iraq and Afghanistan drop off, the budget picture would certainly improve. In calculating its projections, however, CBO assumes that the cost of remaining on a wartime footing will amount to $818 billion through 2013. Recent statements by U.S. occupation coordinator L. Paul Bremer that rebuilding Iraq will cost "several tens of billions" of dollars appears to confirm CBO's predictions.
All of this means that President Bush and Congress face some very difficult choices. Growth in spending for discretionary programs, like health, education, transportation and the military, would have to be limited to something less than the rate of inflation for the next several years. According to one budget think tank, if Congress does not raise taxes or cut Social Security, Medicare, defense or homeland security, all remaining government programs would have to be cut by 41 percent to balance the budget by 2008.
Prescription Drugs, Appropriations Top Agenda
The more immediate impact may be felt as the president and Congress attempt to craft a compromise on a $400 billion Medicare prescription drug bill this Fall. The House and Senate each passed their own version of a drug bill, H.R.1 and S.1, earlier this year. Both call for a new, voluntary outpatient prescription drug benefit to begin in 2006; and both would encourage private companies to offer beneficiaries new types of private managed care plans. But the measures also have significant differences, particularly the question of to what extent Medicare should be run by private health plans versus the federal government.
As a result, legislation that some had thought would sail through by early Autumn, may force lawmakers to sing Christmas carols to one another.
Similarly, Congress set out this year to avoid a repeat of last year's debacle, when it failed to pass most of the government's appropriations bills until five months after the new fiscal year began. The House amazingly passed 11 of the 13 bills before the August recess, however, the Senate has cleared only four bills.
Perhaps the most contentious of all, the Labor-HHS-Education appropriations bill, is on the docket for Senate floor debate. How well that debate goes may serve as a gauge of what the remainder of this legislative session will be like. But absent a miracle, it's a good bet that Congress will not complete its work on appropriations much before Thanksgiving.