"To veto any bill is a prerogative of the President under our system of government. But it’ll be unfortunate if she vetoes the 2006 budget as this will force the government to operate again under a reenacted budget until the end of the year," he said.

"Operating under a reenacted budget repeatedly does not reflect sound management," he said, stressing that this would give Mrs. Arroyo so much discretion in using last year’s annual budget.

Mrs. Arroyo’s threat came after the Senate- House bicameral conference committee remained deadlocked over provisions in the Senate and House versions of the long- delayed 2006 national budget.

In meeting with their House counterparts, the Senate contingent led by Sen. Manuel Villar, chairman of the Senate finance committee, refused to restore the alleged P26 billion "pork barrel funds" cut by the senators.

"She wins either way but the economy suffers. It isn’t good to be working on a reenacted budget," Drilon said, as he defended the Senate’s scrapping of the P3-billion Kilos Asenso Support Fund and the P3.69-billion Kalayaan Barangay Program Fund.

The Senate also cut the P10-billion incentive package for state workers availing of the Rationalization Program and the budgets of the National Printing Office and Presidential Commission on Good Government.

"That’s what an authoritarian says to impress upon the people that what she says goes," Senate Minority Leader Aquilino Pimentel Jr. said. "If the President wants to play hardball, she will get hardball from us."

Sen. Joker Arroyo, in a press conference at the Senate, said the President will further aggravate the "imbalance of power" should she veto the 2006 national budget that he described as an "election budget."

"You can see the picture which is very sad that the President holds all the levers of power when it comes to the budget, and why this has happened is one of the tragedies in our system," he said.

He said even if Congress passes the budget this week, the government will only have to use it for the second half of the year when national and local leaders are preparing for respective candidacies for the forthcoming May 14 elections next year.

"We should not forget that the 2006 budget, whatever its shape or form, is an election budget. Anyone who has his sights on the 2007 elections will think this is something that can help him," he said.

Drilon and Pimentel, however, remained optimistic that the Senate, while being firm on retaining the P26.3 billion cut, can persuade the House contingent to a compromise on the 2006 national budget.

"I still believe that both panels can come to a reasonable agreement, and I think that we will be able to approve the budget with cuts, certainly," Pimentel said.