Congress' spending bill is lean but ignores larger problem

WASHINGTON -- How bad is the government's deficit problem? The just-passed $388 billion bill financing almost every federal agency in 2005 could be eliminated and there would still be red ink.

The massive measure that Congress approved Saturday held the growth of domestic programs to about 1 percent -- one of the sparest increases in years -- falling below the rate of inflation. But the legislation did not touch the largest and fastest-growing side of the budget -- Social Security, Medicare and other benefits paid automatically without Congress having to vote on them.

"If they don't start focusing on the 800-pound gorilla, they'll never be able to get control of the budget," said Robert Bixby, executive director of the Concord Coalition, a group that favors deficit reduction.

Of this year's $2.4 trillion budget, about one-third will be spent on federal programs that Congress must approve every year. These run the gamut from body armor for U.S. troops to food inspectors' salaries.

These programs will total about $822 billion this year -- not including another $100 billion that may be provided for wars in Iraq and Afghanistan and worldwide efforts against terrorism.

More than half of this part of the budget is for defense and domestic security, areas that are largely untouchable.

The rest of this part -- essentially the contents of the bill approved Saturday -- represents about one-sixth of the overall budget. Year-in year-out, it gets most of the scrutiny from lawmakers looking for ways to save money, pressures that were heightened when the government ran a record $413 billion deficit last year.

"We intend to make sure we're not going to have any wild spending sprees like we've had in the past," Rep. Pete Sessions, R-Texas, said during Saturday's debate.

Despite such talk, this session of Congress is ending without slowing the growth of spending for entitlement programs, benefits the government pays automatically to anyone who qualifies.

Led by Medicare and Social Security, these programs are expected to total about $1.5 trillion this year and start growing even faster than they have in the past. The nonpartisan Congressional Budget Office projected in September that these programs will cost $2.5 trillion annually by 2014, with no prospects for slowing down unless lawmakers do something.

"In the end, it's the entitlements that are the real threat to deficits," said Joseph Antos, a health policy analyst at the conservative American Enterprise Institute.

Federal benefits are growing rapidly partly because the 76 million strong baby boom generation will begin drawing on Social Security in 2008, and on Medicare three years later.

In addition, advances in medical technology and pharmaceuticals are making health care ever more expensive. The government calculates that health care costs grew by 9.3 percent in 2002, the most recent year available. And it thinks health expenses will continue to grow at more than 7 percent a year for the foreseeable future, well above the rate of growth of the economy.

Such data spurred the Congressional Budget Office to warn last December, "Unless taxation reaches levels that are unprecedented in the United States, current spending policies will probably be financially unsustainable over the next 50 years."

The report added, "If taxation is restricted to the levels that prevailed in the past, the growth of entitlement spending will have to be substantially reduced."

Reluctant to take on senior citizens, veterans and others who rely on federal benefits, lawmakers have shown little taste recently for culling savings from such programs. They have been especially wary following the political drubbing Republicans took after proposing cuts in Medicare and other benefit programs in 1995.

In fact, the political dynamic has moved the other way. President Bush and Congress created Medicare prescription drug coverage in 2003, estimated to cost at least $400 billion over the next decade, and have boosted benefits for veterans and farmers.

Bush has spoken of taking on benefit programs in his second term, specifically addressing his desire to revamp Social Security. Sen. Judd Gregg, R-N.H., the incoming chairman of the Senate Budget Committee, has also spoken of tackling the growing costs of those programs.

But Bush and others have been quick to say current Social Security recipients would not have their benefits cut -- politically wise, perhaps, but a signal that deficit hawks find discouraging.

"It's in the politicians' best interests to keep those programs on autopilot so they don't have to cut them. Nobody is responsible for the growth," said the Concord Coalition's Bixby.