Insight on the News: GOP Budget Blueprint: the First Draft - the last mintue budget settlement that

Hindus have a name for the roulette wheel of births and rebirths which, depending on an individual's karma (personal acts) and dharma (adherence to religious duties), lands one either in Nirvana or stalled in an endless loop of reincarnations -- they call it samsara. Washington's version of samsara is the budget process, a nearly yearlong series of all-but-identical food fights about who is going to get what and why they deserve it.

But the bad karma of last year's budget finale, when the "emergency" spending loophole was used to bust budget caps and an election-year pork-barrel feeding frenzy ensued, already is affecting this year's, with some members of Congress pledging not to suffer a repeat while others cast a covetous eye on the $700 billion surplus, salivating. Republicans searching for an agenda item with curb appeal seem intent on carving a tax cut out of the sudden surpluses, while Democrats seem either to see surpluses as a boon to federal programs or an issue on which to dog and demagogue Republicans, while holding any proposed cuts hostage to a brokered "fix" of Social Security.

Citing new studies showing the budget surplus ballooning to $700 billion during the next 10 years (assuming most variables remain about the same and the economy suffers neither recession, depression or implosion), over and above what is needed to fix Social Security, Senate Budget Committee Chairman Pete Domenici of New Mexico recently said: "First thing we're going to do is we're going give most of that back to the American people, as much as $600 billion." The tax cut will start out "small," at about a 4 percent reduction, Domenici told a Sunday squawk show, and will "reach full fruition a few years out there," going as high as 15 percent for all income brackets. "We must do it," Domenici said of the proposal. "The evidence is clear we are paying the highest tax rates in 50 years."

Domenici's remarks and published reports suggest the Republican fiscal agenda will rest on four "pillars": returning some portion of the surplus to the taxpayers via tax cuts (including elimination of the so-called "marriage penalty"); reforming federal education programs; improving military readiness; and ensuring the solvency of Social Security.

After last year's debacle, budget reform also is on Republican minds, including the need to pass a budget resolution -- something overlooked in all of last year's excitement. Also being heard is a perennial pitch for biennual budgeting, which some believe would reduce the annual appropriations tail chase and provide more time for agency oversight.

Since taking the gavel, new House Speaker Dennis Hastert of Illinois has pledged early and often to pass all 13 spending bills by summer, rather than waiting until after the snow flies and then cramming the unfinished ones into a monster spending bill -- the appropriator's equivalent of Santa's sack. And to curb the routine exploitation of the emergency-spending loophole, Senate Majority Leader Trent Lott of Mississippi also is proposing a rule change that 60 votes, rather than a simple majority, be required to make an "emergency" designation.

But without a budget deficit to use as a truncheon to keep the big spenders at bay, even some Republicans are warming up to the idea of ditching budget caps -- a potentially ominous sign for taxpayers. "I think they will have to be raised," Senate Appropriations Committee Chairman Ted Stevens of Alaska said of the spending caps. "We cannot live within those caps and continue the [military] modernization" or fund the education reforms Republicans are pushing, he said.

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Vice President Al Gore's reputation as a Boy Scout owes a lot-to Attorney General Janet Reno. True to form, Reno recently rejected a call by the House Commerce Committee to investigate a $1 million fee paid to former Gore chief of staff Peter Knight, a Washington lobbyist, by Tennessee developer Franklin Haney, a Gore "friend" and big-dollar Democratic Party donor.

Committee investigators believe that Knight's fee and another $1 million paid by Haney to former Tennessee senator Jim Sasser, now ambassador to China, illegally may have influenced a leasing deal that bailed out a faltering Washington office complex, The Portals, resulting in a windfall for Haney. The Federal Communications Commission was resisting a move into the new complex, investigators allege, until the intercession of Knight, after which the agency not only agreed to move in but to renegotiate the lease on terms even more lucrative for Haney. Knight received his fee from Haney shortly thereafter, but both men say the payment's timing was coincidental and made for a variety of "general legal work" Knight did for Haney.

Reno apparently found nothing suspicious about the events. She ended a 30-day review of the case without appointing an independent counsel, saying she had no "specific and credible evidence" that any laws were broken.

It was the third time in a year that Reno has declined to name an independent counsel to investigate allegations involving the vice president or his friends -- perhaps suggesting a year 2000 retirement party isn't in her plans.