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Sunday, March 9

Republicans to move ahead on budget despite uncertainty on war costs

By Brian Tumulty

WASHINGTON - Congress begins work Wednesday on a 2004 budget blueprint without an official White House estimate on the cost of an Iraq war.

Republican leaders say the budget resolution for the fiscal year that begins Oct. 1 will take into account occupying and rebuilding Iraq but not a war expected to be over in less than six months. 1991’s Persian Gulf War lasted 42 days.

“This is an ’03 war that is coming at a time when we are writing our ’04 budget,” said House Budget Committee Chairman Jim Nussle, R-Iowa. “However, there may be some ’04 costs that spill over from our ’03 war, and that is what needs to be taken into consideration.”

That’s also the plan Senate Budget Committee Chairman Don Nickles, R-Okla., is following.

“The ’04 cost and beyond would be accounted for,” committee spokeswoman Gayle Osterberg said.
Congressional Republican leaders are following this strategy at the administration’s request. The White House wants to wait until later this year to request the money it is spending now to deploy ground forces in Kuwait, Navy ships in the Persian Gulf area, and aircraft at bases near Iraq.

The money to finance these activities and a possible war will come in a supplemental 2003 budget request after Congress adopts a 2004 budget resolution. But the 2004 resolution will make room for all or part of the $1.5 trillion in tax cuts President Bush proposed for the next 10 years.

A 2004 budget blueprint won't be delayed, according to Senate Majority Leader Bill Frist, R-Tenn.
``I’m absolutely committed to having the budget come up on time,” Frist said, indicating he did not want to repeat the delay in adopting a 2003 budget more than four months late.

“We’ve got to get the economy growing again,” said Nussle, explaining why Republicans rank President Bush’s tax cut-oriented growth package as their No. 1 domestic priority. “A growing economy creates jobs and creates taxpayers, and as a result, creates more revenue.”

Nussle said his committee’s other two priorities will be financing national security and controlling spending.

Domestic discretionary spending, a favorite target of budget cutters, is proposed to increase by only 2.5 percent in the president’s proposed 2004 budget. Overall spending would rise by 4 percent, a figure that Nussle described as disturbing because ``there aren't many families back in Iowa spending at that rate.’’

Meanwhile, Democrats are trying to force Republicans into estimating war costs in any budget plan so the impact of proposed tax cuts can be weighed.

“This is something the American people have the right to know,” Sen. Jon Corzine, D-N.J., insisted Thursday. “What are we thinking when we put together a budget that doesn’t include the cost of a war?”

“In every budget that I ever put together in the private sector, we had to do contingency planning, low-end revenue projections, (and) high-end revenue projections based on the uncertainty in the economy,” said Corzine, a former co-chairman and co-chief executive at the Wall Street investment firm Goldman Sachs. “We need to do that with regard to our budget process here.”

An analysis released Friday from the nonpartisan Congressional Budget Office estimates the Bush’s administration’s 2004 budget proposal would produce $1.8 trillion in deficits over the next 10 years. The deficit would peak at $338 billion in 2004 - about $31 billion higher than the administration estimates. And red ink would continue through 2013.

The administration’s budget proposal offered five-year projections through 2008, so it contained no indication whether the budget would continue to run deficits. White House budget officials dropped 10-year projections because they consider them unreliable.

The CBO estimate of future deficits also understates the problem because it does not take into account the cost of a war.

Instead of incorporating war costs in its projections, the office discussed the issue in a separate section of its new report.

Among CBO’s estimates:

- The current military deployment will cost $14 billion beyond the money already budgeted for routine operations.
- Should a war be waged, the first month of hostilities would cost $10 billion and each subsequent month of combat would cost an additional $8 billion. No estimate was made of how long a war might last.
- Returning troops to their home bases would add $9 billion to the tab.
- Occupying forces would cost $1 billion to $4 billion a month to sustain.

The occupation estimates may be on the low side. Army, Navy and Air Force officials who testified Thursday at a Senate Appropriations Committee hearing put the their post-Saddam military costs in the range of $63 billion to $84 billion through the end of September, according to Sen. Carl Levin, D-Mich.

Other estimates of the cost of a war with Iraq have run even higher. The Center for Strategic and Budgetary Assessments estimates $129 billion to $693 billion for the conflict, peacekeeping, governing post-war Iraq, humanitarian aid, reconstruction, aid to allies and reparations.

Stan Collender, a managing director of the federal budget consulting group at Fleishman-Hillard, thinks the projected deficits will dominate the congressional debate, particularly on the Senate floor, where a weeklong debate is expected later this month.

“The deficit is much bigger than people are comfortable with,” Collender said. “Clearly, over the last month, the political situation has deteriorated for the administration.”

Deficit hawks in Congress think Republicans need to develop a plan to return to budget surpluses. Nussle said he would like to present a date for ending deficit spending but wasn’t certain it could be done because the budget resolution still was being drafted this weekend.

Meanwhile, some Republicans are moving forward with a proposed Constitutional amendment that would require a balanced budget by Dec. 31, 2008.

Rep. Steve Chabot, R-Ohio, who chaired a subcommittee hearing Thursday on the proposed amendment, said House Republican leadership has promised a floor vote before July 4.

On the Web:
ftp://ftp.cbo.gov/40xx/doc4080/Report.pdf, Congressional Budget Office analysis of President Bush’s 2004 budget proposal