The Clinton Budget

April 11, 1993

President Clinton's $1.52 trillion budget is a lot more credible than the rosy scenarios cranked out in the Reagan-Bush era but it still has huge holes that could throw its projections awry. The fiscal history of recent years is one long sad chronicle of predictions to shrink the deficit that never materialized. If Mr. Clinton can change this pattern, it would be one of the triumphs of his presidency.

One factor that shrouds the financial picture is the lack of any provision in the new budget for the landmark health care reforms that First Lady Hillary Clinton's task force is due to propose next month. Yet administration budgeteers rightly insist that deficits cannot be brought under control until soaring health costs are reined in.

Also missing from the Clinton budget are specifics on how government programs are to be cut to conform with $67 billion in reductions folded into the budget resolutions that have just passed Congress. The White House evidently intends to pass this hot potato to the legislative branch.

The new budget shows important new departures. Defense spending is to be cut in favor of nurturing high-tech research and product development to improve the U.S. competitive position.

The administration also is intent on raising taxes on fuel and energy, on some Social Security benefits and on the incomes of the very wealthy to help pay for what it calls "investments" in the nation's physical infrastructure and in the skills of its work force. This requires choices -- between Clinton initiatives and existing programs, between the needs of the elderly and of children, between urban masses and a shrinking farming community, between the environment and economic growth.

While the current Senate stalemate over the president's $16.3 billion jobs-stimulus package (a deficit raiser) might indicate some long and fruitless budget bickering lies ahead on Capitol Hill, the reality is that the Democratic leadership is gearing up for relatively fast action. Administration tax and spending proposals will be lumped together in a huge "reconciliation bill" that Democratic lawmakers, especially, will find difficult to oppose even though they may find devils in its details.

Americans have good reason to take a "show-me" attitude toward administration hopes of cutting the current $300 billion deficit below the $200 billion mark by the end of its current term. Yet the president and Budget Director Leon Panetta deserve credit for basing most of their calculations on figures used by the non-partisan Congressional Budget Office. This allows both branches of government to deal with the same set of figures instead of competing numbers from the White House and the CBO. If this is really a first step toward truth-in-budgeting, perhaps -- just perhaps -- the new president may succeed in hacking away at annual deficits that undercut the security and zTC well-being of this country.

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