"Portman really wanted this," said one associate. Insiders said that the president and some of his political allies had hoped to push for deeper tax cuts in the next and future budgets, but the election of Democratic majorities in the House and Senate killed those plans. Now, according to the insiders, the president plans to submit a "flat" budget for fiscal 2008 that will leave little wiggle room for Democrats to add on new spending projects without deeply cutting into defense spending or raising taxes.
"It will hammer the Democrats," predicted one GOP budget expert. An administration official called the balanced-budget plan "a victory for taxpayers. We can balance the budget and make tax relief permanent, continue to restrain spending."
Aides said that to make it happen, the president will push for earmark reform--something the Democrats appear open to--and the line-item veto.
By Paul Bedard