USA TODAY

August 20, 2001, Monday, FIRST EDITION

SECTION: NEWS; Pg. 7A

Democrats plan attack on Bush's budget

by Jonathan Weisman

DATELINE: WASHINGTON

WASHINGTON -- Democrats will try to use the shrinking budget surplus to shrivel President Bush's political support this' week.

But White House officials are returning fire against the opponents, who charge that President Bush's 10-year, $ 1.35 trillion income tax cut is to blame for a budget that may already be tapping Social Security reserves to pay for other government programs. Bush's aides say that the tax cut will get the economy back on solid footing and that Democrats are just angry they cannot spend more. "It's really sad and a little strange that the Democratic Party, which has historically held itself out as the friend of working people, has had nothing to say about how we get this economy moving again,"

White House budget director Mitch Daniels said on Fox News Sunday. Democrats say they have Bush on the defensive. The White House budget office will release revised budget estimates Wednesday showing that the surplus for this fiscal year, which ends Sept. 30, will be about $ 158 billion. That is 44% smaller than the White House anticipated 6 months ago. Excluding Social Security, the surplus is down to $ 1 billion from the $ 127 billion projected in February.

Only a last-minute accounting change has prevented the White House's budget update from dipping into Social Security reserves. Next week, the Congressional Budget Office is expected to show that those reserves have been tapped. "The president ought to come in with a new budget right now, this fall, to avoid this problem of going into the Social Security trust fund," House Democratic leader Richard Gephardt said Sunday. That challenge will be repeated all week:

* Democrats plan to greet Bush with senior-citizen protests today in Milwaukee and tomorrow in Independence, Mo. The charge: The tax cut has also forced the government to dip into Medicare.

* The Democratic National Committee will begin running TV ads Wednesday in Washington, and possibly elsewhere, mocking Bush for speaking in Independence, the hometown of Democratic President Truman, who proposed Medicare.

* Democratic lawmakers, armed with budget information packets and quotes from GOP leaders pledging not to touch Social Security or Medicare, will hold "town hall meetings" in their home districts this week and next to discuss the budget.

"We see this as a defining moment of the Bush presidency," Democratic National Committee spokeswoman Jennifer Palmieri said. "It's time to go on the offensive."

White House economic adviser Lawrence Lindsey said on Meet the Press, "The president's committed to not touching the Social Security surplus, period." Bush is expected to reiterate that pledge Tuesday in Independence. Lindsey also predicted that the ailing economy would be back on track in a year.