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Monitor Breakfast: Mitchell Daniels
Selected quotations from a Monitor breakfast with Office of Management and Budget Director Mitchell Daniels.
WASHINGTON
On Charges by Rep. David Obey that homeland defense is underfunded:
"He is sincere but he is wrong. Everything that he wants to see done is being done with the greatest possible dispatch. Funding is not the problem and is not going to be for months.
"As of today, close of business Nov. 30th, the estimate is that 84 percent of $40 billion (Congress provided for the war) is unobligated and unspent."
On the need to trim domestic spending growth to pay for war:
"Vietnam we remember as guns and butter. If we do that, we will regret it."
On why he predicts budget deficits for the next several years:
"It is absolutely true that the tax cut has very little to do with red ink we looking at in the next couple of years. The tax cut was $40 billion event in '01, only $35 billion event in '02. [It] begins to phase up after that.
"Senator Daschle and [Rep.] Gephart are wrong it is not only not the biggest factor, it is not the second or third biggest factor. The reasons the ink has shifted from black to red are first of all economic two parts. One is the recession which is official which the administration inherited ... that is a big factor. The other one I mentioned earlier we now are told by all the economists that the underlying productivity rate, which was a big driver of future estimates, had been overestimated between 1995 and 2000. They brought it down about half a point. That doesn't sound like a lot but you run that out for 10 years, it changes the picture very much. Factors like that on the economy, between now and '05 are twice as big as the tax cut in terms of their impact."
On when federal budget balanced might be balanced again:
"The decisions we make here in the near term are going to be decisive as to whether our deficits are temporary if we do things right and the economy recovers we have a fighting chance of black ink in the budget after next that is '04, the one we will be putting together a year after now. If we don't, if the economy continues to struggle, and we let spending keep running we pile the spending for the war on top of everything we are doing today guns and butter style don't look for black ink, maybe indefinitely."
On how to restrain domestic spending:
"We have already made an attempt and it will be primitive for a while to separate the effective from the somewhat effective from the ineffective programs. We are asking managers to set some goals and show us evidence they are getting there. If they can't, or if the evidence says they are not getting there, somebody ought to I would hope people would support either going slow or going down on what we spend on those things. That is the way we will do it. And at this point, I am not harboring dreams of cutting the rest of the budget but for goodness sake we ought to be able to slow down and in selective places stop growth."
On whether voters will hold Mr. Bush responsible for the recession:
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