Panetta, House leaders seek $4 billion more in cuts

March 04, 1993|By Karen Hosler and Gilbert A. Lewthwaite | Karen Hosler and Gilbert A. Lewthwaite,Washington Bureau

WASHINGTON -- Bowing to public pressure for deeper cuts, the White House is working with congressional Democrats to trim President Clinton's proposed budget, but political realities may limit their efforts.

Leon E. Panetta, director of the Office of Management and Budget, and House leaders have set a target of $4 billion that would be slashed from Mr. Clinton's $1.5 trillion spending plan for next year, increasing the total cuts to $24 billion.

Details of the cuts are still being negotiated, but they are expected to come from a further trim of the Pentagon budget and by delaying some of the president's plans for new investment in social programs, according to congressional sources.

Small as the $4 billion target seems in the overall budget, it's enough to be politically painful.

For example, Rep. Steny H. Hoyer has been unsuccessful so far in finding an additional $3 billion in cuts to offset Mr. Clinton's plans to freeze pay raises and other benefits for federal workers, who make up a large part of the Maryland Democrat's Washington suburban district.

Mr. Hoyer, chairman of the House Democratic Caucus, said he believes he has won "sympathy" and a new understanding of the federal employees' plight after three days of private appeals to President Clinton, Mr. Panetta and House Democratic colleagues.

He claims that a federal worker earning $30,000 would sacrifice $14,500 more over the next five years than a worker in private industry under Mr. Clinton's plan.

But Mr. Hoyer still has to come up with a substitute cut.

As the Prince George's County Democrat learned first-hand at town meetings last weekend, voters are skeptical about accepting the additional tax increases Mr. Clinton proposed to reduce the budget deficit without proof that the federal government is tightening its own belt.

Conservative Democrats on the House Budget Committee, which is due to produce its version of Mr. Clinton's budget next week, are working to come up with even more cuts -- perhaps as much as $10 billion for next year.

"I think there's a growing feeling on the part of many House members that if we're going to have to ask our citizens to accept some program cuts, why not make it a big package that will really accomplish something?" asked said Rep. Timothy J. "Tim" Penny, a Minnesota Democrat who has been active in the budget-cutting talks.

But Mr. Penny acknowledged the best way to make deeper cuts is by limiting annual cost-of-living increases for federal benefit programs, such as Social Security, federal retirement and veterans benefits.

Mr. Panetta said yesterday that he is doubtful a majority of Democrats in Congress would be willing to attack such politically popular programs, regardless of the pressure for spending cuts.

"You have to go after entitlements" to find a real savings in the budget, Mr. Panetta told a small group of reporters yesterday. But he said that Mr. Clinton had initially rejected the idea because "it was clear the Senate would not go along."

"If the House and Senate decided, certainly that is an area where you can make general savings," the budget chief said, adding: "It has to be done on the basis there are a majority of members prepared to support that kind of approach."

Mr. Clinton has proposed cutting spending by a total of $248 billion and raising taxes by $246 billion over the next four years.

The total deficit reduction would only be about $325 billion, however, because the president is also seeking $169 billion in new spending.

Mr. Panetta, who met with the House Democratic Caucus yesterday morning, said he told the lawmakers that "have to be specific. We don't want gimmicks, or caps."

Any additional cuts also have to be politically palatable all around, Mr. Panetta said.

That criterion has apparently ruled out, at least for now, further consideration of proposals being promoted by many Republican and some Democratic legislators to cut funding for the space station and Supercollider.

Eliminating those two costly and controversial research projects would save $3 billion next year alone. But scrapping them would be political dynamite in Texas, where ending both projects would mean the loss of more than 8,000 jobs.

If re-election politics were not a problem, the Congress might well give more consideration to a budget-cutting proposal offered yesterday by Sen. Hank Brown.

The Colorado Republican called for $679 billion worth of cuts over five years, including $94 billion from defense, $338 billion from entitlements and $147 billion in other domestic programs. But it was considered political suicide.

He would eliminate a new aircraft program, terminate agricultural subsidies and freeze federal overhead costs.

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