Politics & Policy

CONGRESS EXITS AFTER COMPLETING A BUDGET WITH DOMESTIC, DEFENSE,
FOREIGN-AID BILLS

WASHINGTON -- Congress went home after putting in place the last pieces of
a federal budget that promises guns, butter and near-certain deficits in
the coming year.

Following on the heels of landmark legislation to improve the nation's
public schools, lawmakers sent President Bush a $396 billion
domestic-spending bill providing near 15% increases for education and
medical research. A $317.5 billion Pentagon bill, including controversial
provisions to help Boeing Co. airliner sales, quickly followed, and at
nightfall, a third and final bill, a $15.4 billion foreign-aid package
cleared the last hurdle in the Senate.

Counting additional emergency appropriations approved after the Sept.11
terrorist attacks, military and intelligence spending will grow by more
than $36 billion from last year. In the case of foreign aid, there are also
substantial new commitments, including aid to Pakistan and other Central
Asia allies that are part of the Bush administration's coalition against
terrorism.

The increased spending comes as projected revenue has fallen because of the
faltering economy and last spring's tax cuts. New budget forecasts are due
next month, but most analysts agree the government is now on the cusp of
falling into deficit for fiscal 2002. The $313 billion surplus predicted a
year ago is gone -- even without costly legislation to stimulate the economy.

More military and antiterrorism money will be needed by the spring, and
Senate Majority Leader Tom Daschle (D., S.D.) predicted that domestic
programs risk being caught in the crunch. "I don't even want to go down
that road," said House Appropriations Committee Chairman Bill Young (R.,
Fla.), when asked by reporters to speculate about the problems ahead. "I
want you to go home."

Following is a summary of major provisions in the final bills:

* Foreign aid: The Bush administration is promised both new resources and
greater discretion in its fight against terrorism. On top of the $15.4
billion approved Thursday evening, an additional $1 billion will come from
emergency funds approved shortly after Sept. 11, for a total increase of
about 9% from last year. Restrictions on aid to Azerbaijan would be relaxed
to allow U.S. military and intelligence agencies to work more closely with
the largely Muslim state bordering the oil-rich Caspian Sea. The measure
also suspends drug-trafficking penalties to make it easier for the
administration to work with other Central Asian countries that have been
centers for narcotics trade.

Among major accounts, $1.43 billion is provided for child-survival and
health programs, almost $460 million more than the administration
requested. Export-Import Bank subsidies are preserved at $727.3 million, or
$94 million more than the White House had sought. But Mr. Bush was forced
to accept a 15% cut from his Andean drug-initiative request. To placate
House conservatives, the Senate agreed to cap contributions to United
Nations population-planning programs, but total U.S. assistance world-wide
for family planning would grow to about $492.5 million.

* Homeland defense and New York: Attached to the final Pentagon budget is a
$20 billion emergency-spending package devoted to fund the war against
terrorism -- at home and overseas -- and help New York City and other
communities hurt most by the hijack attacks.

An estimated $8.3 billion is devoted to help domestic agencies beef up
aviation and postal security, for example, and prepare for future
bioterrorism threats. Within the $8.2 billion dedicated to New York and
other communities is $100 million to boost ferry service as an alternative
for commuters from New Jersey to the downtown Manhattan financial district.

* Military procurement and Boeing leases: Despite the big defense-funding
increases, total procurement would grow only modestly to $60.8 billion, up
$1.6 billion from last year. But over the angry objections of Sen. John
McCain (R., Ariz.), Boeing won novel provisions opening the door for the
Pentagon to lease as many as 104 jetliners from the Chicago company, which
has been hurt badly by the drop-off in aircraft sales. As many as 100 767s
would be used to replace aging tankers in the Air Force's fleet; the annual
cost will rise to nearly $2.86 billion by 2013. An additional four 737s
would be leased for use by the executive branch and Congress for official
business.

* Home-state projects: Both the education and military budget bills are
peppered with earmarks for favored interests. Despite its recent troubles,
even the American Red Cross came away with several million dollars from the
defense budget. The eclectic items range from "U.S.-Norwegian Telemedicine"
to plans for a museum in Alabama around a Civil War-era ship.