FEDERAL BUDGET Notice to agencies warns of cutbacks

A White House official said the memo did not represent a final policy.
WASHINGTON POST
WASHINGTON -- The White House put government agencies on notice this month that if President Bush is re-elected, his budget for 2006 may include spending cuts for virtually all agencies in charge of domestic programs, including education, homeland security and others the president backed in this campaign year.
Administration officials had dismissed the significance of the proposed cuts when they surfaced in February as part of an internal White House budget office computer printout. At the time, officials said the cuts were based on a formula and did not accurately reflect administration policy. But a May 19 White House budget memorandum obtained by The Washington Post said agencies should assume the spending levels in that printout when they prepare their fiscal 2006 budgets this summer.
"Assume accounts are funded at the 2006 level specified in the 2005 Budget database," the memo informs federal program associate directors and their deputies. "If you propose to increase funding above that level for any account, it must be offset within your agency by proposing to decrease funding below that level in other accounts."
J.T. Young, a spokesman for the White House Office of Management and Budget, said the memo, titled "Planning Guidance for the FY 2006 Budget," is a routine "process document" to help agency officials begin establishing budget procedures for 2006. In no way should it be interpreted as a final policy decision, or even a planning document, he said.
"Agencies have asked for this sort of direction," Young said. "Budgeting is basically a yearlong process, and you have to start somewhere. They'll get more guidance as the year goes along."
Impact of amounts
The funding levels referred to in the memo would be a tiny slice out of the federal budget -- $2.3 billion, or 0.56 percent, out of the $412.7 billion requested for fiscal 2005 for domestic programs and homeland security that is subject to Congress's annual discretion.
But the cuts are politically sensitive, targeting popular programs that Bush has been touting on the campaign trail. The Education Department; a nutrition program for women, infants and children; Head Start; home ownership; job training; medical research; and science programs all face cuts in 2006.
"Despite [administration] denials, this memorandum confirms what we suspected all along," said Thomas Kahn, Democratic staff director on the House Budget Committee. "Next February, the administration plans to propose spending cuts in key government services to pay for oversized tax cuts."
But with the budget deficit exceeding $400 billion this year, tough and painful cuts are unavoidable, said Brian Riedl, a budget analyst at the conservative Heritage Foundation.
Previous increases
Federal agencies saw their discretionary spending rise 39 percent in the past three years. "I think the public is ready for spending cuts," Riedl said. "Not only does the public understand there's a lot of waste in the federal budget, but the public is ready to make sacrifices during the war on terror."
The administration has widely touted a $1.7 billion increase in discretionary funding for the Education Department in its 2005 budget, but the 2006 guidance would pare that back by $1.5 billion. The Veterans Affairs Department is slated to get a $519 million spending increase in 2005, to $29.7 billion, and a $910 million cut in 2006 that would bring its budget below the 2004 level.
Also slated for cuts are the Environmental Protection Agency, the National Science Foundation, the Small Business Administration, the Transportation Department, the Social Security Administration, the Interior Department and the Army Corps of Engineers.
Agencies would have the option of preserving current funding levels for programs under their control if they find money from other parts of their budget. But the computer printout contains specific program cuts.