Bush veto threat looms for highway bill

With an election year and a record $521 billion budget deficit looming, President Bush is moving toward a first in his presidency: use of a veto against a Republican-controlled Congress.

The fight over budget-busting transportation and energy bills now playing out on Capitol Hill are a key test of White House resolve to rein in nondefense spending. With rising prices at the gas pumps and congested highways, Congress can point to public demand for spending on those issues. But observers also see political motives: perks for the energy industry and construction jobs for many lawmakers' home districts.

Until now, the main battles with Congress have been waged along partisan lines, such as the gridlock with Senate Democrats over a handful of judicial nominations. On Friday, the White House blindsided Democrats on the Senate Judiciary Committee by using last week's congressional recess to appoint disputed nominee William Pryor - Bush's second recess appointment to the federal bench.

But the fight over big energy and highway bills cuts deep across party lines. And for Republicans, it's forcing a tough choice: Line up with president and show that their party can govern when it controls both ends of Pennsylvania avenue - or split with the White House to bring more federal dollars into the district.

The lure of pork-barrel spending in an election year is proving hard for leaders on both sides of the aisle to resist. The $318 billion transportation bill that the Senate passed before last week's recess is $62 billion more than the White House says it can support. It passed by a wide margin (76 to 21) just a day after the White House issued a veto threat. Encouraged by the strong Senate vote, Republicans on the House Transportation and Infrastructure Committee are testing prospects for a $375 billion plan.

"The highway bill is being seen as a litmus test of the ability of Congress and the administration to deal effectively with the deficit," Treasury Secretary Snow told a Senate Finance Committee panel. "To see a bill come out well above [$256 billion] would have a very, very erosive effect on financial market confidence in all of us," he said.

In a bid to avoid a break with President Bush so close to an election, GOP leaders are angling for more time to work out a compromise. On Feb. 11, the House passed a five-month extension of the highway bill, now set to terminate Feb. 29.

Even Democratic leaders were pressed hard to add pet projects to the Senate bill. Last minute additions to the bill included $30 million for roads in Alaska and repeal of 25-cent tax on wagers at casinos, expected to cost about $100 million.

Sticker shock is also threatening to derail a new national energy policy. After a previous version of the energy bill failed in Congress last November, Senate Republicans lopped off some $17 billion in tax breaks that had ballooned its cost up to $31 billion, in a bid to win over balking GOP conservatives. Even at its new $14 billion level, the bill is $6 billion more than the White House says it can support.

GOP lawmakers - many of whom won their seats on a pledge to bring fiscal discipline to Washington - agree there's a need for spending cuts, but just not in their highway or power project. Senate GOP aides say that the controversial bill may be bumped into the 109th Congress.

"Hopefully, the veto threat will stop the big spenders in Congress, and produce fiscally responsible legislation that will not harm taxpayers" says Tom Schatz, president of the Council for Citizens Against Government Waste.

To be sure, much road spending isn't waste. Severe highway bottlenecks now number 288 in 40 states and the District of Columbia, up from 167 choke points in 33 states in 1996, according to a new study by Cambridge Systematics. Major reconstruction projects are making a difference in cities like Albuquerque, Denver, and Houston, which have dropped out of the top 18 bottlenecks.

Meanwhile, sharply higher energy prices contributed to a 0.5 percent rise in inflation, more than double December's 0.2 percent increase, according to a report by the Labor Department on Friday. Republicans say it's another reason why a new energy bill is essential, the first in 12 years.

"Republicans will claim that their energy bill will help with prices at the pump, but it will do nothing of the sort," says Bill Wicker, Democratic spokesman on the Senate Energy Committee. "It contains most of the deficiencies and special- interest giveaways" in last year's failed bill.