One Budget Cheer
Bush makes progress, but gives Congress a pass on earmarks.

As we at the Journal debated Washington's latest spending deal yesterday, one of our tribe noted that it is the best budget of the Bush Presidency. To which someone else quipped that that was "the soft bigotry of low expectations."

As we write this, the political deal seems set, with Democrats passing a 3,400-page, $516 billion "omnibus" budget bill, and President Bush prepared to sign it. Both sides are claiming victory, which usually means that taxpayers are the losers. That's less true this year because Mr. Bush has used his veto power to back Congress down from its typical excesses. But Mr. Bush could have pressed for an even harder taxpayer bargain, especially on earmarks. So we'd give it a single budget cheer.

The good news is that Democrats conceded to Mr. Bush's spending cap of $933 billion in domestic discretionary spending for 2008--or $22 billion less than Democrats proposed in their spring budget resolution. Over five years, that $22 billion will save about $205 billion because it won't become part of the annual "baseline" that the pols use as a starting point for next year's automatic budget increases. This is a modest but real victory.

Democrats also agreed to strip the bill of numerous policy changes that Mr. Bush had threatened to veto but they had hoped to slip past him in the giant package. Gone are limits on union disclosure reports. Gone, too, is an expansion of Davis-Bacon demands to pay prevailing union wages even on non-union work sites; as well as an easing of the Cuban trade embargo, and elimination of the language limiting American aid to promote abortions abroad.

Oh, and Congress is also funding the wars in Iraq and Afghanistan to the tune of $70 billion--something Democratic leaders had vowed not to do. White House sources add all of this up and say that sooner or later a President has to take yes for an answer--or else he looks unreasonable. The howls of frustration coming from liberal interest groups suggest they have a point.

And yet this is hardly a lean or mean budget. When combined with the Defense spending bill that has already been signed, Congress will still exceed Mr. Bush's $933 billion "top-line" thanks to about $11 billion in budget gimmicks and "emergency" spending. (Such spending isn't added to the "baseline" budget.) This includes $2.9 billion for "border security," $100 million for security for the Democratic and Republican conventions next year, $500 million for California wildfires, plus more for home heating oil and other political favorites. Had Mr. Bush wanted to take a harder line, he could easily have argued that Congress should finance these priorities by cutting somewhere else.

Even worse is the President's abdication on earmarks, or Member-requested pork. Mr. Bush had publicly insisted that Congress should cut the number of earmarks by 50% this year, from 13,492 in fiscal 2007. Ah, not quite. The "omnibus" includes 8,983 earmarks, and counting, which brings the total so far to 11,144 including those passed as part of the Defense bill. As a percentage decline that is only 17%.

The pork barrel includes $700 million for a Minnesota bike trail, $113,000 for rodent control in Alaska, and $1 million for an energy project in the district of Lousiana Democrat William Jefferson, who faces trial for bribery next year. Dozens of these earmarks were "air-dropped" into the bill at the last minute, meaning that fiscal conservative Members lacked the time to find and fight them on the House or Senate floor.

Mr. Bush could have had a PR field day by using these projects as his reason for vetoing the bill. Congress would then have had little choice but to pass a "continuing resolution" that maintained spending for 2008 at levels similar to this year. That would have been a true taxpayer triumph, and would have done far more to rehabilitate Mr. Bush's record on fiscal issues than this omnibus will.

House Republicans voted against the omnibus bill en masse, but the truth is that many of them and their Senate brethren privately wanted it to pass as much as Democrats did. They want their earmarks too. Ray LaHood of Illinois is typical of those GOP appropriators who helped to drive their party into the minority by spending like Democrats. They look good only in comparison to Democrats, who have shown this year that their claims of "fiscal discipline" are entirely phony, except when they refer to raising taxes.

The larger lesson of this year is that divided government has its uses. By using his veto pen, and with the help of House Republicans in particular, Mr. Bush has been able to reduce the rate of spending growth and continue to shape policy. The Schip heealth care vetoes were especially important in showing Democrats that the GOP couldn't be easily rolled, despite a media assault and GOP Senate surrender. That's more than we expected, even if it's not as much as Mr. Bush might have achieved. May we have even more virtuous gridlock next year.