(STAR) The House of Representatives will insist on substantially reducing funds described as part of President Arroyo’s pork barrel in her proposed P1.227-trillion 2008 national budget.

Albay Rep. Edcel Lagman, appropriations committee chairman, said yesterday the House decision to reduce the P296-billion item for loan interest payments in next year’s outlay by P18 billion “is completely justified.”

He said the reduction is equivalent to the amount the government expects to save as a result of the immense appreciation in the value of the peso against the US dollar.

He said the P296 billion that the President is seeking for interest payments “is now overstated,” and that the excess should be appropriated for social services instead of being kept in the debt service item.

He pointed out that during the time of former President Fidel Ramos, Congress reduced debt service funds by billions of pesos, and that Ramos accepted the reduction.

The P296-billion interest payment appropriation for next year is based on an assumed rate of 48 to the dollar. The exchange rate is now 42 to $1 and is expected to improve further.

The House has realigned the P18 billion it cut from debt service to social services. Education and health received the biggest augmentations.

In approving their version of the budget, senators restored P13 billion of the P18-billion House-recommended reduction. They were willing to cut interest payments by P5 billion only.

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

According to opposition Sen. Panfilo Lacson, if the savings on interest payments were kept in the debt service item, Mrs. Arroyo would have discretion on what to do with them at the end of next year.

In effect, such savings will form part of “presidential pork” that she can dispense to political allies, said Lacson, one of the Senate budget conferees.

Lagman, who heads the House contingent in the bicameral conference committee that is reconciling the divergent Senate and House versions of the 2008 budget, said his panel has not thrown in the towel in the suspended conference.

He has accused House Majority Leader Arthur Defensor of “treason to Congress” for saying that the conference committee should come up with a final version of the budget that should be acceptable to Mrs. Arroyo.

He said to throw in the towel would be to surrender to Malacañang the congressional primacy over the budget, which is enshrined in the Constitution.

Budget Secretary Rolando Andaya Jr. has warned lawmakers that the President might be forced to exercise her veto power if Congress insists on reducing debt service funds by P18 billion.

He claimed that part of the reduction was diverted to the congressional pork barrel.

The bicameral conference on the budget was convened last Monday but was immediately suspended indefinitely due to wide differences between the Senate and House versions of the spending program.

Lagman and his Senate counterpart, Sen. Juan Ponce Enrile, were authorized to meet during the six-week recess to try to iron out those differences. – Jess Diaz

Chief News Editor: Sol Jose Vanzi

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