Senate Budget Battle Heats Up

0 Comments | Insight on the News, April 30, 2001 | by Jennifer G. Hickey

The Senate's 50-50 split between Republicans and Democrats has galvanized the budget debate, forcing each side to do everything it can to prevent defections and win over converts.

Discounting Iraq, which has become as boring and as predictable as a Bela Lugosi movie, President George W. Bush has proved in his first foreign-policy crisis that it no longer is enough to say what you mean and mean what you say. As Insight goes to press, 24 U.S. Air Force personnel, women and men, sit in diplomatic purgatory between being "guests" and "hostages" as the foreign-policy professionals of the People's Republic of China and the United States wrangle about the meaning of "apology" and "regret." Where is Bill Clinton now that we have need to send in someone who knows what the meaning of "is" is?

Meanwhile, thousands of miles away and safe from anything more dangerous than a punch in the nose, Democrats and Republicans took up the timeless debate about taxing and spending. The GOP having secured a comfortable victory in the House vote on the Bush budget resolution, both sides knew that getting the president's tax cut out of an evenly split Senate would be no less complicated than negotiating with the Chinese.

Vice President Richard Cheney moved quietly behind the scenes trying to lure liberal Republicans to sign on to the administration's 10-year, $1.6 trillion tax cut. He found them in an extortionate mood, prepared to allow the measure to be held hostage while they demanded support for their pet projects. There was a much less discreet lobbying effort outside the U.S. Capitol.

On April 3, Fair Taxes for All, a coalition of more than 500 liberal and left-liberal organizations, staked their carnival grounds in front of the Senate to rally against the "reckless and irresponsible" budget resolution being debated. In addition to Democratic Sens. Paul Wellstone of Minnesota, Barbara Mikulski of Maryland and Jon Corzine of New Jersey, Senate Minority Leader Tom Daschle of South Dakota made a brief appearance. Standing against the Bush plan, but not for any other alternative, are representatives of groups as varied as the National Gay and Lesbian Task Force, the Food Research and Action Center, the National Gray Panthers and the YMCA of USA. Daschle told them "the cost of the tax cuts outweighs all other priorities combined," and would "gut our investments in health and education." In this case "investments" meant pouring billions into the coffers of the teacher unions and trial lawyers.

While the vice president was able to win one for Dubya with a tie-breaking vote early in the week, the mantra that Republicans were "gutting education" proved more persuasive. The Bush administration suffered an undeniable setback when Republican Sens. James Jeffords of Vermont, Arlen Specter of Pennsylvania and Lincoln Chafee of Rhode Island broke ranks on April 4 to vote for a Democratic alternative that would lower the tax cuts by $450 billion and add $250 billion over 10 years in "investment" for debt relief and further federalizing of the schools.

Both Jeffords and Chafee had been primary targets for conversion, but Specter's defection came as a surprise. All three justified their votes on the claim that it was impossible to have both increases in spending on education and a $1.6 trillion tax cut. But the pious demand for increased education spending took on new meaning in light of testimony before the House Education and the Workforce subcommittee on Select Education.

In addressing the long-standing problem of financial mismanagement at the Department of Education, Lorraine Lewis, the agency's inspector general, testified the department had misused at least $450 million in the final three years of the Clinton administration. "The disappointing thing is that the situation is much the same," said subcommittee chairman Rep. Pete Hoekstra, R-Mich., who cited graft turned up in audits in each of the last three years. Lewis said the latest audit, which was conducted by Ernst & Young, found the "department's financial-management systems did not substantially comply with the Federal Financial Management Improvement Act requirements."

Furthermore, on March 16, Scott R. Lassar, the U.S. attorney for the Northern District of Illinois, joined Lewis in announcing that 26 individuals had been "charged in 23 separate cases with fraudulently obtaining a total of more than $2.6 million" from the Education Department (see waste & abuse, p. 47). Typical of fraud allegedly committed by other defendants, one Arthur Young II obtained $13,320 in education aid for two children over five years, and Patricia Garner obtained $12,480 for one child over two years. How in need of student aid were they? Young's actual income during this period was between $68,000 and $100,000, while Garner's exceeded $108,000 in each of those years.

The Illinois case resembles another in which $1.9 million in aid money intended for children in two South Dakota school districts was diverted illegally and used to buy real estate and a Cadillac (but not a Lexus, however).