Bush's $5 trillion problem: Rising deficit troubles GOP

Republican Party's tenet of small government has run up against a surge in domestic spending, plus war, tax cuts.

Even before President Bush's next budget hits Capitol Hill, lawmakers even in his own party are mounting barricades against what many see as a spending binge that's settling into a habit.

The internal revolt, coming from dozens of Republican lawmakers, signals that Mr. Bush faces a rift within his own party over one of its core ideological tenets - smaller government - even as he faces growing criticism on the issue from Democratic presidential candidates.

Bush has not entirely dropped the goal of fiscal restraint. This week he called on Congress to "cut the deficit in half over the next five years." But to some observers, Bush and his party have been looking more like the party of big government than small. Behind the scenes, the GOP debate now is whether big spending has become the price of retaining political power in today's America - or an intolerable breach of the party's principles.

Most experts agree that recent forecasts of US fiscal health are alarming:

• Deficits are expected to reach or exceed $5 trillion over the next decade, according to new studies by groups ranging from the Center on Budget and Policy Priorities to Goldman Sachs.

• The federal budget deficit this year is expected to approach $500 billion. That's a record, although sustainable in the short term if the economy grows fast enough.

• The Medicare system is expected to go cash negative for the first time in 2015; Social Security in 2018.

"It's a system that's completely out of control, and it's an absolute disgrace," says Sen. John McCain (R) of Arizona, commenting on the runaway spending on Capitol Hill.

In his one reference to the deficit in this week's State of the Union address, President Bush promised to submit a budget that limits the growth in discretionary spending to less than 4 percent and halve the deficit in five years. When he also urged lawmakers to make his tax cuts permanent, Republicans cheered. Democrats sat in stony silence.

"What we have here is an administration that has overseen the largest fiscal reversal in our nation's history.... Unless we change course, we are left with deficits as far as the eye can see," says Rep. John Spratt (D) of South Carolina, ranking member on the House Budget Committee, who pegs the cost of making tax cuts permanent at $2.5 trillion over 20 years.

Many Republicans worry that tax cuts without significant spending cuts cannot be sustained. Moreover, they note that much of the increase has been in nondefense discretionary spending. The conservative Club for Growth estimates that the Bush administration has increased domestic discretionary spending by 8.2 percent, compared with 2.5 percent during the Clinton years.

In response to such concerns, the Republican Study Committee, a caucus of some 90 GOP conservatives, this week called for zero net growth in spending for the 2005 fiscal year and urged the president to find offsets for any new spending.

"We've had substantial spending growth over the last three years, and it cannot be blamed simply on homeland security and defense," says Rep. John Shadegg (R) of Arizona, one of 25 GOP conservatives to vote against the Bush White House on expanding Medicare last year because of its impact on the deficit.

The fight goes to some of the core tenets of a party that fought its way back to power on Capitol Hill on a campaign for fiscal discipline. Some conservative activists have said that deficits can serve a useful purpose by disciplining the Congress and will eventually "starve the beast," or government. But so far there's not much evidence that is the case. New congressional ratings by the American Conservative Union signal that members of Congress are also less solidly conservative. "As President George W. Bush consolidated his power over the Republican majorities in both houses, voting in Congress changed more dramatically than at any time since the American Conservative Union began measuring the legislative process," said Donald Devine, an ACU vice chairman, citing the spending. rise in particular

That spending will be difficult to rein in, especially in a presidential election year.

Indeed, balancing the budget by 2013 would require steps as drastic as raising individual and corporate income taxes by 27 percent, eliminating Medicare entirely, or cutting Social Security benefits by 60 percent, according to the Committee for Economic Development, the Concord Coalition, and the Center of Budget and Policy Priorities. Rep. Christopher Cox (R) of California proposes a reform bill that would limit spending increases to the rate of population growth and inflation.

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