By Stan Collender, NationalJournal.com
© National Journal Group Inc.
Tuesday, May 15, 2007

The Bush administration signaled last week that it was going to war with Congress over the FY08 appropriations.

	It's hard to see how the administration's latest budget strategy can succeed.

This was a huge budgetary and political blunder. The White House not only won't win this fight, but historians may look back and view this as the moment George W. Bush's lame-duck status became both incontrovertible and irreversible.

The administration revealed its plan through a letter from Office of Management and Budget Director Rob Portman, who said the amount of spending in the budget resolution being negotiated by House and Senate conferees was too high and that all appropriations would, therefore, be vetoed.

The White House complaint concerns a roughly $20 billion increase in appropriations over the amount the president included in the budget he sent Congress in February. While Portman's letter shows that rhetorical flourishes can be used to make this seem like a huge increase, the truth is that it is a virtually insignificant difference -- about seven-tenths of 1 percent of the total amount of the federal government's projected spending in FY08.

This increase will have no appreciable impact on the U.S. economy, interest rates or government borrowing. And with federal revenues much higher than anticipated, the deficit will still be below previous projections even with the very small amount of additional spending Congress is considering.

Portman's letter deals with a poorly understood part of the congressional budget process. Once an overall spending limit is agreed to, only the specific appropriation that exceeds the cap actually violates the limit. Even if all of the other appropriations that come before it had higher-than-budgeted spending and the last bill is less than expected, the bill responsible for exceeding the cap is generally the one subject to sanctions.

Over the past six years, the Republican-controlled Congress dealt with the politics of this rule by making sure the Pentagon and Homeland Security appropriations were considered first. That made it impossible for those bills to cause a spending cap breach.

That wasn't a problem, of course, in years like 2006 when Congress and the White House failed to enact anything but those two appropriations.

This year, the White House is worried about the opposite happening. The assumption is that, instead of being the first bill passed and sent to the president, the FY08 Pentagon appropriation will be the last one considered by Congress. With domestic and homeland security appropriations totaling around $500 billion, the DOD appropriation will almost certainly cause the cap to be exceeded.

The White House obviously decided it didn't want to wait for the Pentagon appropriation before talking about excessive spending -- or reductions. That's why the Bush administration had Portman send the letter saying the president would veto every appropriation if the budget resolution assumed the $20 billion increase instead of waiting for the precise bill that caused spending to be higher than what the president proposed.

This may work well in theory, but the White House cannot possibly come out on top in this situation.

The strategy outlined in Portman's letter assumes House and Senate Republicans will always back the White House and vote to sustain the president's veto; that is extremely questionable. Indeed, an override is very possible because the first few FY08 appropriations Congress sends to the White House will be those that have a great deal of GOP support.

Immediately after Portman's letter was made public, I was told by several people close to the appropriations committees that the bills providing additional funds for Walter Reed Army Medical Center and other veterans programs, the National Institutes of Health, the Food and Drug Administration, agriculture and Katrina relief could be among the first to be adopted and sent to the president. It will be hard, perhaps even impossible, for Republicans to oppose these appropriations.

This will create enormous problems for the White House. If the president vetoes these bills and one or more are overridden, the administration's influence on congressional Republicans will appear to have hit rock bottom.

On the other hand, not vetoing an appropriation after the Portman letter guaranteed it would happen will make the president's resolve look weak and raise questions about what he might do for the other bills. This will embolden congressional Democrats and Republicans alike to challenge the White House further on other issues.

The better strategy for the White House would have been not to issue the blanket challenge in the Portman letter so that it had some room to maneuver on a bill-by-bill basis. The administration could have simply complained about the overall level of spending in the budget resolution without taking any responsibility for it because that legislation isn't subject to a veto and it would have been solely Congress' decision. Then, the White House could have evaluated the support for each appropriation bill individually and vetoed only those it was certain of winning.

The Portman letter makes that strategy impossible. It also puts congressional Republicans in a very difficult position by forcing them to choose between supporting the White House and hurting themselves back home.

It's hard to see how those Republicans will side with the White House under these circumstances and, therefore, how the administration's latest budget strategy can succeed.

-- Stan Collender is a NationalJournal.com contributing editor and managing director at Qorvis Communications in Washington, D.C. A frequent speaker on the budget and the economy to audiences across the country, he is also author of "The Guide to the Federal Budget." His e-mail address is secollender@nationaljournal.com.

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