Hey, Big Spender ...

(2 of 4)

In Bush's defense, Bolten points to the economy the President inherited. "We ended up in our deficit situation because we had this burst bubble," he said during an interview in his office, which features a Norman Rockwell painting of a runaway train. "Revenues just disappeared, and this was well before the President's tax cuts." But when Bush came into office, the CBO was actually projecting surpluses for years to come, until the tax cuts hit and the deficit started growing. If the tax cuts don't expire, many economists say, the revenue gap will persist.

It's true that the President pushed through some tough budget cuts last year, notably the virtual elimination of popular programs like Clinton's community policing initiatives, which provided money to local government for nontraditional patrols. Bush's plans for 2007 will be slightly tougher still, and the prospect of those cuts has already led some Cabinet Secretaries to push back, hoping to preserve pet programs. A few Secretaries have tried to go behind Bolten's back to undo the potential damage. Instead of sticking to the White House's cumbersome appeals process, which involves meetings with officials of escalating rank, they pleaded for mercy when meeting with Bush on other issues. "The President consistently knocked back the end runs," Bolten recalled with relish. "He always outed them to me--usually, if possible, in their presence. He's willing to take some pretty tough political medicine to make the budget come out right, and he's spread that philosophy across the Cabinet, which is very helpful to me."

Administration officials said they expect the proposals for cuts and eliminations to be similar to those of last year, when Bush asked for $16 billion in savings in 154 programs and Congress wound up passing $6 billion in savings in 89 programs. Bolten said that he "started this conversation with the President toward the end of the summer" and that Bush began by calling for stable or increased funding for priorities like the military. "On the other things, every step along the way, he directed a tight budget," Bolten said. "Toward the middle of the process, I came to him with some areas where we were going to need to take some cuts in programs that are politically popular. In almost every instance, he said, 'Yes, go ahead and do it.' We had in the room the President's legislative, political and communications advisers, some of whom periodically disagreed. But in almost every case, he backed up my recommendation to take a hard line on some of the spending that was not at the top of the priority list."

In his State of the Union speech, Bush is expected to propose no expensive new initiatives and focus instead on midsize ideas like promoting more rigorous education in basic math and science. But he will suggest changes that won't necessarily save the government money--like expanding Health Savings Accounts, which allow individuals to save for health care in tax-free, 401(k)-style accounts. And when you hear about Katrina and the wars in Iraq and Afghanistan, don't assume their final cost figures will be spelled out in the budget Bush is sending to Congress six days after the address. Those will appear in so-called supplemental requests for money, adding further to the deficit.