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THURSDAY, AUGUST 23, 2001

The White House on Wednesday released a tighter than expected forecast of the federal budget, hinting of slowing growth in the next few years as the second largest surplus in history shrinks due to President Bush's tax cut.

Despite a $158 billion surplus for the current fiscal year, less than $1 billion remains once Social Security payroll taxes are excluded. As recently as April, the Office of Management and Budget had predicted a non-Social Security surplus of $122 billion.

Next year, the non-Social Security excess will increase only to $1 billion with an overall surplus of $173 billion. The Social Security system is off limits for spending or tax cuts so it is excluded when analyzing the surplus.

Yesterday's projections led Republicans to push for frugality in the budget -- which Bush supports -- and Democrats to criticize Bush for making bad financial decisions. Third party groups in turn faulted lawmakers for spending too much on special projects.

The White House attributed part of the shrinking surplus to Bush's $1.35 trillion tax cut. But they also said the fiscal year 2001 appropriations bills were the "single largest factor" in reducing the surplus.

That hints that Indian Country -- mostly in the form of the Department of Interior -- cannot expect to see much growth during the remainder of Bush's term. For fiscal year 2002, Bush had already slashed the the Interior budget by some 4 percent.

Bureau of Indian Affairs spending managed to survive the cutting floor and emerge with a slight $65.9 million increase (3.1 percent), bringing Bush's proposal to $2.2 billion. In comparison, the BIA's fiscal year 2001 budget under President Clinton grew by an historic 15 percent.

According to yesterday's report, it won't be until fiscal year 2004 that Interior spending will return to Clinton-era levels. Even after that, the budget will increase only slightly for the rest of Bush's term.

The Interior budget has grown by an average of 5.2 percent since 1998, according to White House figures. In comparison, Health and Human Services, which includes the Indian Health Service, has grown an average of 11.2 percent.

Congress returns to work next month to finalize the 2002 spending bills. Both the House and the Senate have passed their own versions of the Interior budget, which include increases to Indian Country spending above Bush's request.

The $18.7 billion Senate version includes $23.8 million in additional funds for Indian spending. The $18.9 billion House version adds $10.3 million for Indian Country.

Congress next week will release its own budget forecast.

More on the Budget:
Full Report | Summary | Press Conference

Related Budget Stories:
Senate passes Interior spending bill (7/13)
House approves Interior spending bill (6/22)
Energy: Indian funds cut (4/13)
Environment: No new tribal grants (4/13)
Some BIA programs lose out (4/13)
Housing: No big benefit for tribes (4/12)
Indian Health Service: Budget sees increase (4/10)
Department of Interior: Indian Overview (4/10)
BIA Budget: Tiny Steps (4/10)
Bush cuts Interior budget (3/1)
Fiscal Year 2002: The Budget Overview (3/1)
Bush pushes tax cut, budget (2/28)
Norton warns of Interior budget cuts (2/16)