Press Briefing by Director of OMB Rob Portman on the Budget

Business Wire, July 11, 2007

Chart five shows the spending side of things. I mentioned earlier that one of the concerns that I have about maintaining this path to balance is spending. Even if we keep the economy strong at 3 percent growth, we've got to keep the brakes on spending in order to stay on track for balance. This shows the difference between where we are in our discretionary spending and where the congressional budget resolution is, and also where the annual appropriations bills are at this point. Again, we're already seeing in the 2008 projection, because of the supplemental expenses and the entitlements and, in the out-years, some impact on the deficit, that will, of course, grow unless we keep restraint on the spending side and address the unsustainable growth in these entitlement programs.

On the discretionary side, the President has a 6.9 percent increase in spending in the '08 budget. This is almost triple inflation. Now, admittedly, much of that increase is directed toward the security side of the ledger, particularly DOD. But I will also tell you that if you look at our budget over the next five years, including this year, the '08 budget and through 2012, we do have some increases in domestic discretionary spending that's totally non-security. We have about a 1 percent growth rate.

Our last three budgets, as you know, have been cuts in the domestic discretionary side. This time our budget, we believe, is more in keeping with where Congress has been, because in the last three years the congressional appropriations bills have had 1.3 percent average increases in domestic discretionary spending. They, too, have kept it under inflation, including this year, with the Democrats in control, under the CR.

So for people to say, gee, you guys don't have enough money in your budget, of course, your top line can't be capped at $933 billion, I disagree with that. I think it's reasonable for the federal government to be spending the amounts we need to spend to provide for our national security. I think a 6.9 percent increase in spending is substantial. I think most American households would agree with that. And I think the growth, the 1 percent growth on the domestic discretionary side by prioritizing, by getting rid of programs that don't work -- and we have 141 programs that we either eliminate or substantially reduce -- I think we can meet the nation's priorities and continue the path toward a balanced budget. We do not have a freeze; we had some growth and, therefore, some flexibility to work with Congress on keeping to that top line of $933 billion.

The Democrats plan, as you know through their budget resolution and, again, through their individual appropriations bills, add about $22 billion more in spending than we have in 2008, and about $200 billion in new spending over the five-year period. The President has indicated that he's going to hold the line on spending, and that includes vetoing bills that are over the top line. The one exception to that the President has already talked about is the Veterans Affairs bill, the Mil-Con VA bill.