Gregg produces 'vanilla' budget, in contrast to RSC

Senate Budget Committee Chairman Judd Gregg (R-N.H.) unveiled a milquetoast budget proposal yesterday as the House’s most conservative members ratcheted up their call for massive cuts to federal programs, illustrating the divisions among Republicans over election-year fiscal policy and the difficulties the party faces in enacting a budget.

Disagreements in the House have forced Gregg’s counterpart, Budget Committee Chairman Jim Nussle (R-Iowa), to push his mark up back to at least the end of this month. Gregg’s draft, a concession to the political realities of the Senate, does not call for a repeat of the broad spending cuts that Congress just enacted as part of its fiscal 2006 budget.

Rather than pushing cuts to mandatory spending through the filibuster-proof reconciliation process, as they did last year, Senate leaders have opted to create a single, narrowly targeted reconciliation bill. That measure would assume revenue from opening Alaska’s Arctic National Wildlife Refuge to oil drilling.

The Senate budget, expected to be approved by the committee today, aims to give a modest boost to defense programs by increasing discretionary spending from $842 billion in fiscal 2006 to $873 billion in fiscal 2007.

That likely means another tight year for the non-defense discretionary programs that dominate most appropriators’ attention.

According to a Senate Budget Committee chart, the deficit would be slightly less in fiscal 2007 than in the current year, falling from $372 billion to $359 billion. It would dip to $159 billion in 2010 before rising again the following year.

But as House conservatives clamor for following last year’s tax and spending cuts with more of the same, the Senate budget is most notable for its omission of them.

“I call it a standard, vanilla budget,” Gregg said yesterday.

Because a copy of Gregg’s budget was not publicly available, Democrats criticized the White House budget, which Gregg sought to parallel in many areas.

“The president’s budget fails on the question of priorities,” said Sen. Kent Conrad (N.D.), the top Democrat on the committee.

Conrad, painting a bleak fiscal picture, said a “vanilla” budget would not help.

“This is a time that calls for bold action,” Conrad said.

Republicans had tremendous difficulty enacting the budget for the current fiscal year, which began in October. Action on the spending cuts was not completed until calendar year 2006, and a package of $70 billion in tax cuts over five years has not yet been completed.

The Senate is expected to act on a measure increasing the statutory limit on the national debt to about $9 trillion next week.

Meanwhile, House conservatives tried yesterday to claim the reform mantle of the 1994 Contract With America by releasing a proposal that they say would balance the budget by 2011.

The conservative Republican Study Committee (RSC) is calling for a budget-reconciliation package that would net $358 billion in savings over five years. The bulk of the savings would be found in changes to the Medicare and Medicaid healthcare programs for the elderly and poor.

The RSC would turn the Medicaid program into block grants to states and establish means testing within the controversial Medicare prescription-drug program. A bloc of House conservatives voted against the creation of the prescription-drug program in 2003.

“We are not, as a nation, living within our means,” said RSC Chairman Mike Pence (R-Ind.).

House leaders are still trying to develop a budget for their chamber. While some in the House support including Arctic-drilling provisions, including them could imperil the measure on the floor. It is also unclear how hard Republican leaders will press for savings from mandatory programs.

Despite their strong call for eliminating and reshaping government programs, conservatives appear to be aware of the difficulty their Senate counterparts face in building on last year’s spending cuts.

“It’s a heavy lift to get it signed into law,” said an aide to House conservatives, who are pushing their leaders to attempt to achieve some savings from that part of the budget this year.

“If there was nothing, it would be serious,” the aide said. “You want to do something every year.”

House leaders’ sensitivity to the RSC’s demands was evident yesterday when newly installed Majority Leader John Boehner (R-Ohio) and his chief rival for that post, Majority Whip Roy Blunt (R-Mo.), both issued statements praising the RSC’s efforts.

Over on the sixth floor of the Senate’s Dirksen Building, former Budget Committee Chairman Pete Domenici (R-N.M) said what many of his colleagues must have been thinking about Gregg’s plan: “This is not a budget that’s going to have very significant impact on the fiscal policy of this country.”

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