Bush Calls Emergency Budget Meeting  

By ALAN FRAM
.c The Associated Press

WASHINGTON (Sept. 7) - The White House budget chief warned top congressional Republicans Friday that the Social Security surplus is on track to be tapped for other programs this year, a politically perilous event that President Bush and lawmakers from both parties have repeatedly promised to avoid.

The news prompted an alarmed House Speaker Dennis Hastert, R-Ill., and Senate Minority Leader Trent Lott, R-Miss., to discuss options for avoiding that scenario with Bush at an abruptly called White House meeting.

Republicans, particularly in the House where lawmakers face re-election next year, are nervous that Democrats would use the turn of events against them. Democrats have blamed the problem on the price tag of the 10-year, $1.35 trillion tax cut Bush pushed through Congress.

Budget director Mitchell Daniels told House GOP leaders that the bite out of Social Security could be about $9 billion, said several Republicans speaking on condition of anonymity. One aide said Daniels told them it could be as much as $15 billion.

While that would have no effect on the program's solvency and would still leave this year's surplus the second biggest ever, it could violate a pledge that most politicians are adamant about obeying. Many of them worry that Americans believe the giant pension program for the elderly and disabled would be weakened if even small portions of its annual surplus are used for other federal activities.

Bush and the leaders made no decisions about what to do, aides said. Among the options Hastert offered were across-the-board spending cuts that would be triggered automatically should Social Security's surpluses be eroded, and trimming Bush's request for higher defense spending, they said.

White House officials would not comment on the situation. A spokesman for Senate Majority Leader Tom Daschle, D-S.D., while declining to say how Democrats would fix the problem, was quick to drop it on the White House's lap.

''It's refreshing to see someone in the administration owning up to the problem, even though the president hasn't,'' said Daschle spokesman Douglas Hattaway.

The president, emerging from his session with the GOP leaders, made no mention of the Social Security situation. Instead, he focused on the day's other troublesome economic news: that the nation's unemployment rate had risen to 4.9 percent last month, a 0.4 point increase that was the largest in six years.

''I want the American people to know we're deeply concerned about the unemployment rates, and we intend to do something about it,'' Bush said.

Just last month, the White House budget office said this year's projected $157 billion Social Security surplus would not be used to finance other federal programs, and that the overall federal surplus would be $158 billion.

But the nonpartisan Congressional Budget Office has estimated that $9 billion in Social Security funds would be needed.

The current fiscal year, 2001, ends on Sept. 30, giving the administration little time to find the savings that would be needed to avoid dipping into Social Security.

Many House Republicans favor immediate, automatic spending cuts in next year's budget by whatever amount this year's Social Security surpluses are drained.

But the idea received a lukewarm reception from many White House officials and Senate Republicans. They worry it would make the already tight budget for next year even tighter, and would cut so many programs that even many Republicans might balk.

In addition, there was some concern that if Bush embraced a broad spending reduction, it could let Democrats argue that the tax cut was causing problems.

Even so, House Majority Leader Dick Armey, R-Texas, was likely to broach the idea of automatic spending cuts publicly in a weekend television appearance. And Sens. George Voinovich, R-Ohio, and Zell Miller, D-Ga., are expected to introduce a version of the plan next week. Miller often sides with the White House on fiscal matters.

It was unclear what prospects such a proposal would have in the Democratic-controlled Senate. Democrats - and even many moderate Republicans - have traditionally opposed across-the-board spending reductions.

Some in the GOP feel that even if the Senate kills the plan, Republicans would win politically because they would be able to blame its demise - and the erosion of Social Security surpluses - on Democrats.

Just this week, Daniels sent a memo to agency heads urging them to constrain spending in the year's final weeks in an effort to avoid siphoning Social Security funds.

Several aides said the White House meeting was originally sought by administration officials to discuss the day's gloomy unemployment news. But they said Hastert and Lott used the session to discuss the Social Security problem with Bush and his top aides.

AP-NY-09-07-01 1850EDT

Copyright 2001 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. All active hyperlinks have been inserted by AOL.

This has been my biggest worry for some time, that the Democrats would convince the sheeple that the Bush Admin is responsible for the economic downturn.  Also more people on unemployment means more flocking to Democrats for handouts.  NOW things look worrysome for the off year elections.  Sheeple tend to think with their wallets.

hell if Bush let's us start having all the goodies his old man & clinton took away, I won't mind paying alittle extra tax when buying them

The worse the economy becomes, the better for RKBA. People tend to want protection (i.e. guns) when they think there may be bad times ahead.

JBTs don't work cheap--if they make budget cuts, enforcement gets cut, too.  It's good for gun owners whenever government has to cut back (e.g. get smaller), we end up with more freedom not less.  They have less money to train as well as to field agents in all the various alphabet soup agencies.  Too bad more freedom means less to lose sometimes...  

Bush has backed Congress into a corner--he's not as stupid as many people think.  Through the tax cut, he has literally forced Congress to reduce the size and scope of government.  The socialists all hate his guts and the smear campaign is on.  And yes, I do think the downturn has been at least somewhat orchestrated by the elite to try to make Bush look bad and play the public right into the hands of the leftists.  It's just too much like the recession that got Clinton elected.

Democrats should be hung for treason.  The social security surplus is a huge drag on the economy.  In a recession you want defecit spending, not a surplus.  Time to cut taxes more and privatize social security.

GunLvr