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Expect Congress to take a pass on cutting spending

WASHINGTON—From the new Fed chairman to Republican activists, the clamor about the federal budget is the same: Beware the deficits, stop the spending.

But in the halls of Congress, where lawmakers hear the pleadings of special interests—from pharmaceutical makers to farmers, health insurers to health care workers—the deficit alarm is a silent bell. Lawmakers are more worried about pleasing the voters they'll face in November.

As the Republican-controlled Congress tackles the fiscal 2007 budget, no one expects significant cuts in spending on Medicare and Medicaid, defense, homeland security or the myriad other programs that touch the lives of millions of Americans.

The Senate this week fended off, in a tie vote, a Democratic effort to require all new tax cuts and spending increases to be offset by spending cuts elsewhere. The House of Representatives on Wednesday beat back an attempt by fiscal conservatives to require offsetting cuts to pay for $91.8 billion in spending for Iraq and the hurricane-damaged Gulf Coast states.

In both cases, Republican leaders led the fight against budget restraint. In the Senate, Republicans said Democrats only wanted to make it more difficult to extend expiring tax cuts. In the House, GOP leaders wanted to avoid forcing Republicans facing tough re-election fights to cut popular programs.

"It's difficult to do that with small majorities in an election year, when every cut and slice is going to get magnified," said Rep. Tom Davis, R-Va.

Twenty-nine House Republicans voted against their party leadership Wednesday on a rule to set terms of debate on the spending bill. It was an extraordinary defection on a measure that typically receives a party-line vote.

"House conservatives were profoundly disappointed," said Rep. Mike Pence, R-Ind., the leader of House GOP fiscal conservatives.

Fiscal conservative activists warn that out-of-control spending and the growing federal government could haunt Republicans in November. They say frustrated voters may stay home, convinced that Republicans won't take steps to limit the government.

Contrast the conservatives' preference for small government, however, with Davis' experience Tuesday night, which exemplifies the demands facing any lawmaker, no matter the party, in the world beyond the Washington Beltway.

Speaking to a neighborhood association in his suburban district, Davis touted his ability to obtain federal money for local needs. His audience asked for federal cash to help with traffic congestion, schools and other local priorities.

Another example: On Wednesday, Sen. Rick Santorum, R-Pa., who faces a tough re-election fight this year, led a bipartisan Senate majority to increase spending by $1.3 billion on community-development block grants, which are highly popular back home.

Even as they sidestep difficult spending trims, Republicans continue to demand that tax cuts enacted during Bush's presidency be extended permanently. They argue that while tax cuts reduce revenues in the short term, they spur economic growth that yields more revenue down the road. Democrats say the tax cuts cause federal debt to soar dangerously.

In wrestling with these questions, lawmakers mix economic theory, policy and politics. The federal budget deficit stands at $423 billion, a large number, but about average as a percentage of the gross domestic product over the past 30 years.

But upon the impending retirement of the baby boom generation, spending on Social Security and Medicare will spike sharply, by trillions. Not coincidentally, the Senate is to vote Thursday to raise the nation's debt ceiling by $781 billion.

The national debt has grown 50 percent during Bush's presidency.

Federal Reserve Chairman Ben Bernanke urged Congress last week to reduce the deficit.

"The prospective increase in the budget deficit will place at risk future living standards of our country," Bernanke said in a letter responding to questions from Sen. Robert Menendez, D-N.J. "Steps should be taken soon to address the long-term budget pressures so that people have adequate time to prepare for whatever changes might occur, especially to entitlement programs."

But that's not popular anymore, if it ever was.

A poll this week by the Pew Research Center found that the public no longer views the deficit as a crisis, unlike in the 1990s. In 1993, 17 percent listed the deficit as the most important problem facing the nation, behind unemployment and the economy. In January, only 2 percent considered the deficit the most important issue.

As a result, Republicans calculate that cutting spending is politically riskier than not.

House Majority Leader John Boehner, R-Ohio, said this week that if lawmakers want to tackle Social Security, Medicare and Medicaid, they first must educate the public.

"To go in and start making cuts without first helping people understand the problem, the extent of the problem, and the fact that these programs are not sustainable for the long term is, I think, political suicide," he said.

Ignoring the big-ticket programs, Congress is left to decide whether to cut smaller ones, such as rural health care, schools or housing. And that, lawmakers find, is no more palatable.

"You're nickel-and-dime-ing things," said Sen. Pat Roberts, R-Kan., who regularly fights to restore spending for agriculture and rural services. "You don't really save that much on the deficit, but you stir up anthills of protests."

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(Knight Ridder Newspapers correspondent Steven Thomma contributed to this report.)

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(c) 2006, Knight Ridder/Tribune Information Services.

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