The Back Story at OMB

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There are few people in Washington who better understand the inner machinations of government than Scott Lilly, the former staff director of the House Appropriations Committee (among many posts he has held on Capitol Hill) and now a senior fellow at the Center for American Progress. Today, he writes about the back story behind the replacement of Rob Portman as head of OMB and suggests it doesn’t bode well for President Bush’s announced plan to dust off his veto pen and make “excessive” spending an issue against the Democratic Congress. Here’s part of what Lilly writes:

It is easy to see why the White House wants to focus public attention on issues other than those that have dominated the airwaves in recent weeks, namely the war in Iraq, the performance of embattled Attorney General Alberto Gonzales, and the legal issues surrounding Vice President Cheney’s former aide-de-camp Scooter Libby.

Portman, well regarded by the press and politicians in both parties, seemed perfectly positioned to state the White House case on spending and at least partially shift the nation’s attention toward issues other than those that have plagued the White House in recent months. But to the surprise of nearly everyone, Portman announced on June 19 that he was resigning—only 14 months after accepting the job and with only 18 months remaining in the administration. The explanation was the conventional, “to spend more time with family” as well as hints that he may run for governor of Ohio in three years.

The real reason, however, may have more to do with the refusal of the White House to maintain what Portman considered a consistent position on the budget fight he was being asked to lead. For weeks, Portman had been attempting to draw a line in the sand on appropriation bills that exceeded the president’s request. The most problematic of those was the Military Construction and Veteran Affairs bill and particularly the portion of the bill dealing with VA medical care.

Portman felt he had provided adequately for veterans despite the criticisms of veterans groups and many in Congress More importantly, Portman recognized that the nearly $15 billion increase Congress was proposing for that bill, a 30 percent boost above last year’s level, represented nearly 40 percent of the annual growth in discretionary spending excluding the Defense appropriation bill.

But congressional Republicans refused to hold the line on veterans and in the end the president decided not to back Portman’s repeated veto threats on the Military Construction-Veterans appropriation measure. Instead, Bush instructed Portman to draft a Statement of Administration Policy for the bill that reiterated concerns about overall spending but failed to include even the boiler plate phrase “senior advisors would recommend that he president veto the bill” in its current form.

Portman, a former congressman, had spent enough years in the House to know that opposing the bill would be difficult. But he also knew the numbers well enough to know that any offensive against excess spending would have serious credibility problems if, as an opening shot, it turned a blind eye to 40 percent of the problem.

UPDATE: Commenter Walter W. Winchell (with a side order of snark) asks for more context. Commenter (Welcome to Swampland!) Scott Lilly graciously provides it:

In the current year, discretionary appropriations total $873 billion or less than a third of total federal spending. Bush has requested for 2008 that level be raised to $933. The Congress is crafting bills that will spend at $953 or $20 billion above the President.

It is important when looking at these numbers to note how highly concentrated the President’s request is. $43.3 is for the Defense Bill, $10.9 is for Military Construction and Veterans and $3.6 is for Foreigh Operations. That leaves only $2.3 billion for domestic programs and that entire amount is allocated to Homeland Security leaving $0 to be distributed among the 8 bills that represent investments in this country.

Of the $20 billion that Congress is adding, $4 billion went to Mil Con-VA and $2 billion went to Homeland Security. The remaining $14 is only slightly more than enough to keep domestic programs even with inflation.

The entire $20 billion increase proposed by Congress is about a 2/3 of 1 percent increase in federal spending. By ignoring the increase in the MilCon VA bill the White House has reduced their fight for fiscal responsibility to be focused on less than 1/2 of 1 percent of the entire budget.

Also worth noting for your 2008 campaign scoresheet: With former Iowa Congressman Jim Nussle’s move to OMB, Rudy Giuliani loses his top Iowa campaign adviser.

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