House throws in towel on ’08 budget

This early in the deadlocked Senate-House conference on the proposed P1.227-trillion 2008 budget, congressmen appear to be throwing in the towel and will not insist on cutting President Arroyo’s proposal by at least P17 billion.

The final version of the budget that the bicameral conference committee would come up with “should be one that is acceptable to the President,” House Majority Leader Arthur Defensor said yesterday.

He said it would be futile for the committee to endorse a budget that is different from Mrs. Arroyo’s proposal since she would veto or reject changes in her recommended spending program, anyway.

He said it is unlikely that the House would overturn a presidential veto on any Congress-approved change in her proposed budget.

Defensor made the remarks in reaction to a statement from Budget Secretary Rolando Andaya Jr. that the President might reject the House-suggested P17-billion cut in the P296 billion set aside for loan interest payments in the 2008 outlay if the conference committee approves it.

The House made the reduction in the wake of the immense appreciation in the value of the peso against the dollar. It realigned the huge cut to social services, including health and education.

In passing their version of the budget, senators restored P12 billion of the P17 billion that congressmen had taken away from interest payment funds. They were willing to cut those funds by P5 billion only.

It is ironic that in the ongoing congressional tug-of-war on the proposed 2008 budget, the opposition-dominated Senate is serving as Mrs. Arroyo’s ally against the administration-controlled House.

Tens of billions of pesos in interest payments will be saved due to the peso’s appreciation. Interest payment funds in the 2008 budget were computed on the basis of an assumed exchange rate of P46-P48 to the dollar. The rate is now about P42 to one dollar and is expected to further improve.

If the projected savings are kept in the budget, President Arroyo will have the discretion on where to use the funds.

Opposition Sen. Panfilo Lacson has expressed fear that these billions in savings would form part of the “presidential pork barrel.”

The Senate and the House adjourned session for their six-week Christmas break last Wednesday without approving the proposed 2008 budget.

The bicameral conference convened on Monday but was suspended indefinitely due to the wide differences between the two chambers’ versions of the budget.

On Thursday, Speaker Jose de Venecia Jr. said the conferees would meet during the recess to try to iron out the two chambers’ differences and come up with a final version of the spending program before session resumes later next month.

The bicameral conference is headed by Albay Rep. Edcel Lagman, who chairs the House appropriations committee, and his Senate counterpart, Sen. Juan Ponce Enrile.

Lagman has vowed to insist on the House decision to cut interest payments by P17 billion and use the amount for social services.

In warning lawmakers of a possible presidential veto, Andaya said the best way to break the Senate-House impasse on the budget is for congressmen to forget about their large interest payment reduction and keep the President’s budget proposal intact.

That would be equivalent to surrendering the prerogative of Congress over the budget, some congressmen complained. The legislature is supposed to hold the key to the nation’s purse, they said.

According to Lacson, the budget stalemate boils down to the issue of presidential pork barrel.

“I think this is where all the argument in the bicameral conference will narrow down to – is the President willing to cut funds at her disposal and lock these funds in social services like health and education?” he said.

He said besides the projected savings in interest payments, the P3-billion Kilos Asenso fund and P1-billion Kalayaan ng Barangay fund form part of “presidential pork.”

The House had cut these two items by P1 billion.

These two items are new appropriations in the annual outlay. Two years ago, Mrs. Arroyo included these in her 2006 budget proposal. She sought P5 billion for Kilos Asenso and P3 billion for Kalayaan ng Barangay, for a total of P8 billion.

The Senate, headed then by former senator Franklin Drilon, wanted to scrap the P8 billion “presidential pork,” but Mrs. Arroyo, supported by the House, insisted that it be kept.

That sent the bicameral conference on the budget into a deadlock. It never resumed and no budget was enacted for 2006. - Jess Diaz