The American Spectator

This morning I attended a bloggers' briefing with OMB director Jim Nussle, which touched on topics including SCHIP, entitlements, and growth in discretionary spending.

Nussle said he was surprised that Democrats announced they would refuse to negotiate with President Bush over SCHIP. "It's surprising if this is about children," he said. "If they want to preserve a political issue that polls well, I can understand why they want to keep doing this."

Listening to Nussle, however, it was abundantly clear why this is such a losing battle for the White House. Nussle emphasized that Bush called for a 20% increase in SCHIP and that "he wants to ensure that children don't fall between the cracks."  Once you abandon any arguments about the proper role of government, it just becomes a debate over who is willing to provide more money to cover more children, and that's an argument Republicans can't win.

I asked Nussle about the looming entitlement crisis, specifically, whether there was any reason to be optimistic that Congress would address the issue before we face a fiscal catastrophe. He wasn't very reassuring.

"Every moment that passes, the hill gets steeper to climb," he said, and the options "become harder to adopt."

President Bush was ready to have a conversation with Congress about Social Security with "no preconditions," and proposed slowing the growth curve for Medicare and Medicaid slightly from 7.7 percent to 7.5 percent, but they wouldn't have it.

"I hope it doesn't take a catastrophe to wake people up, but unfortunately we are in a two year cycle," he said.

People always say nothing can be done during an election year, but "the challenge, of course, is that there's never an off year anymore. It's always an election year, so if somebody's waiting for an off year, there ain't one coming."

Asked about spending growth during the Bush years, he said that Bush had a much smaller degree of control over discretionary spending than his predecessors because of the rise of mandatory spending, and after the Clinton years we faced a "security deficit." So, the increase in defense and homeland security spending is what lead to the rise.

One scary statistic was that if tax levels remain constant, by 2040, entitlement spending will take up 100% of the budget.

UPDATE: Robert Bluey sends along some video.