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10:00 PM Fri, Sept. 21st

Non-defense spending is in the crosshairs

WASHINGTON – Lawmakers, bureaucrats and the special interests who live off the taxpayers are eagerly awaiting President Bush's next budget, which insiders say will be the toughest he has ever submitted.

While the news focus this week will be on Bush's inauguration and his long-term plans for the next four years, the shorter-term focus is, as always, on money and whose programs will be cut or frozen in the president's fiscal 2006 spending plan. The battle lines have already begun to form.

Last week, Heritage Foundation President Edwin J. Feulner, one of Bush's staunchest allies, fired a warning shot across the president's budgetary bow in a sharply critical assessment of Bush's fiscal policies over the past four years.

Writing in Heritage's quadrennial "Mandate for Leadership" book, Feulner praised Bush for strengthening national security and cutting taxes. But he also admonished him for pushing too many big government proposals, including massive spending increases in Medicare, federal aid to education and farm subsidies, and for imposing protectionist steel tariffs that hurt consumers and manufacturers alike.

Acknowledging that Bush ran and won on a second-term agenda that called for limiting the growth of government, Feulner skeptically said that "it remains to be seen whether the rhetoric of the (president's) campaign will be manifest in Washington in the coming years. Sadly, commitment to principle has been missing in Washington's politics for quite some time now."

Among his complaints, Feulner said that it was especially "disappointing ... to see Congress pass and the president sign the biggest farm bill and the biggest education bill in our nation's history, as well as the largest entitlement increase since Lyndon Johnson's so-called Great Society."

Well, that was Bush's first term. In the second term, say budget watchers, you will see a new Bush who will be more aggressive on discretionary, non-defense expenditures whose overall levels in 2005 will be essentially frozen next year. Bush gave a peek into his budget plans last week when he told The Washington Times that his spending blueprint was "going to be tough."

White House Chief of Staff Andy Card underscored that message when he told the U.S. Chamber of Commerce that Bush will exert "very, very strong discipline" on next year's spending. "That discipline will be there big time," Card told business leaders.

Among the budget-cutting targets: the bloated Agriculture Department, corporate welfare, scientific research, housing, state and local government giveaway grants, and other low-priority and no-priority programs that the administration will slash or eliminate.

Some of the spending cuts that have been leaking out include taking the axe to the waste-ridden Community Development Block Grants that have mushroomed to $5 billion under Bush, but could drop as much as 50 percent. With an annual deficit of more than $400 billion, it is hard to defend a program that is building horseback riding trails, bike paths, yacht harbors, swimming pools, movie theaters, water parks and other spending boondoggles.

Budget officials tell me that they will cut other Housing and Urban Development programs. Indeed, housing programs overall are likely to freeze at last year's levels, as are many other spending programs in the budget.

The National Science Foundation's social research grants, which have drawn criticism for years for being wasteful, will drop and officials expect NSF's overall spending to be flatline. So will the National Institutes of Health, which has seen its budget skyrocket over the past decade, especially in the past four years.

Bush's budget will call for spending cuts and reforms that he has proposed before but that Congress has ignored. However, the fiscal climate has changed on Capitol Hill as Republican lawmakers focus more intently on Bush's promise to slash the deficit in half over the next four years.

So Bush will try once again to slash the Army Corps of Engineers, whose building projects have wasted billions of dollars. He proposed a nearly $600 million cut this year, but to no avail. White House officials say they think Congress will be tougher on the Corps' budget this time around.

Of course, you can't get a real handle on spending if you don't restrain the growth in entitlements, and the administration's prescription drug benefit program will sharply boost Medicare spending in the coming years – big time.

One way to curb entitlements is to block grant programs to the states. In 2004, the administration proposed turning Medicaid over to the states in a plan that would have given governors wider discretion to tighten eligibility rules. Bush will be back with this proposal, arguing that it is time to give the states greater flexibility over a health care program they have responsibility for delivering.

Can Bush rein in runaway domestic spending by cutting the fat out of the federal budget? In the absence of political pressures in a non-election year, and with a stronger GOP majority in both chambers, the chances are reasonably good that he can, and will.