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Democrats prove accounting gimmicks are bipartisan

WASHINGTON—When President Bush sent Congress his 2008 budget last week, Democratic lawmakers accused him of using accounting gimmicks to appear fiscally responsible and intent on reducing the federal deficit.

Turns out, the Democrats have some accounting tricks of their own.

A massive spending bill to fund the government through September contains billions of dollars in savings that exist only on paper, but which free up real money to spend on discretionary programs Bush has sought to cut.

"It's a way of finding some money to reassert Democratic priorities without being labeled big spenders," said Tim Penny, a former Democratic congressman from Minnesota.

The House of Representatives passed the $463.5 billion appropriations legislation Jan. 31, and the Senate took it up Tuesday.

While the Bush budget looks ahead, the appropriations measure covers the current fiscal year.

Budget experts from both parties, including current and former lawmakers and senior aides, said the Democrats' legislation relies on various types of creative accounting and side deals in order for it to appear to avoid new deficit spending.

Among the examples:

_The measure provides $2.49 billion for the ongoing realignment and closing of military bases, less than half the amount authorized by the last Congress. There is bipartisan agreement to make up the difference—$3.14 billion—in subsequent "emergency" supplemental appropriations.

_The measure eliminates $3.5 billion in "contract authority" for federal highway projects, but it doesn't decrease "obligation limitations" by an equivalent amount. Congress uses "contract authority" to set how much money states can seek in highway grants, but it doesn't determine how much money they actually get. Appropriators make those decisions each year by setting "obligation limitations," and those limitations must be lowered in order for the actual spending to be decreased.

_The bill puts a $625 million cap on the amount of money to be distributed from the Crime Victims Fund, which Congress created in 1984 to help the victims of heinous crimes. The cap saves $1.25 billion on paper, but the government is required by previous law to pay the crime victims, so there will be no corresponding reduction in spending.

Democrats now running Congress needed to craft the giant spending bill because Republicans voted out of power in November had appropriated money only for the Defense and Homeland Security departments.

A temporary measure providing discretionary funds for the rest of the government expires Thursday, so Congress must approve the current bill by then. The House passed it 286-140, and the Senate is expected to approve it.

Sen. Robert Byrd of West Virginia and Rep. David Obey of Wisconsin, the new Democratic chairmen of the Senate and House appropriations committees, put the measure together without hearings. Lawmakers cannot offer amendments.

"We're very proud of this bill because this is the cleanest bill that has passed Congress in a long time," said Kirstin Brost, a spokeswoman for Obey. "We got rid of all the earmarks. We got rid of all kinds of gimmicks that the president had proposed."

Byrd, well known for using arcane budget procedures to bring federal windfalls back home to West Virginia, didn't respond to interview requests.

Some of the beneficiaries of the extra money freed up by the Democrats' maneuvers are state and local police, the Army Corps of Engineers and Amtrak.

"Republican appropriators did this, too," said Rep. Paul Ryan of Wisconsin, senior Republican on the House Budget Committee. "These guys add up their priorities, find out they're over (budget limits) by $10 billion or $12 billion, then they come up with these gimmicks to massage the numbers. I hate to say it, but both parties do it."

Such bookkeeping maneuvers are so well known on Capitol Hill that lawmakers and aides jokingly call them "Enron accounting rules," after the Houston energy company that collapsed because of phony fiscal schemes that sent several senior executives to prison.

William Hoagland, who served as a Senate Budget Committee staff director for 20 years, was former Majority Leader Bill Frist's point man on fiscal matters from 2003 through last year.

"These pay shifts, these delays, these advance appropriations are not unusual," Hoagland said. "They're not big in the grand scheme of things, but they can make a difference in whether you can fund a program at $100 million versus $200 million. In the average American's world, that's a lot of money."

Sen. Jim DeMint, a South Carolina Republican, said he would vote against the bill, despite having led a successful drive to prevent it from having new earmarks, secret, anonymous funding for lawmakers' pet projects.

"All in all, I feel like this represents some progress, even though there are still a lot of budgetary games stuck in here," DeMint said.

Hoagland acknowledged that the former GOP congressional leaders bequeathed a financial muddle to their Democratic successors, who now need to get 2007 funding behind them and focus on appropriations for the 2008 fiscal year that begins Oct. 1.

"One could claim that this is just cleaning up the mess we (Republicans) left behind," Hoagland said.


(c) 2007, McClatchy-Tribune Information Services.

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