Clinton budget to be 'cut-and-spend'

February 07, 1994|By Carl M. Cannon | Carl M. Cannon,Washington Bureau of The Sun Victoria White of The Sun's Washington Bureau contributed to this article.

WASHINGTON -- President Clinton will submit today what he and his aides characterize as a future-oriented blueprint for breaking with the obsolete government programs of the past.

In his first full budget, Mr. Clinton proposes holding the line on most government agencies, including cutting some 115 programs, and using that money for forward-looking "investments." These priorities range from the "information superhighway" to impoverished pre-schoolers -- and retraining their parents for "the jobs of tomorrow."

'Human investment'

"The president has made it very clear that his thrust, his shifts, are in the direction of human investment," Education Secretary Richard W. Riley said last week.

But there is another side to the president's proposed budget for fiscal year 1995. It does not break the government's addiction to chronic deficit spending. Thus, the sea of red ink it adds to America's staggering national debt will be paid for by . . . well, by the children of today -- the taxpayers of the future.

"That's the thing that puzzles me," said Carol Cox Wait, president of the Committee for a Responsible Federal Budget. "If the chief executive of a large business pointed out to those in his organization that we had these kinds of structural [budgetary] problems -- and made no effort to change them -- he'd be fired on the spot."

Robert E. Rubin, chairman of the president's National Economic Council, argues that cutting more government spending would impede the economic recovery. Instead, White House officials say they want to spend government money in a way that pays long-range dividends.

A snapshot illustrating this priority can be seen in the budget for mass transit. Officials said the president will propose cutting by 25 percent the federal subsidies to operate local mass-transit systems. But at the same time, the administration proposes making the same amount that is being cut -- about $200 million -- available for cities to buy new buses and trains.

The theory is that operational money simply disappears into the void while money for big capital purchases buys something of value -- and helps put Americans in other sectors to work.

"It's not tax-and-spend anymore -- it's cut-and-spend," said Stanley E. Collender, director of federal budget policy for the Price Waterhouse accounting firm. "This budget is going to show the president's priorities -- spending more on children will be one of the big themes -- but it will also show that deficit reduction has moved to the back burner."

Last year, when the deficit was on the front burner, the administration was pushed by Congress into a series of spending reductions, which, along with low interest rates and the Clinton tax increases on the well-to-do, lowered the projected budget deficit.

This year is an election year, however, so there will be no tax bill in Congress to raise more revenue, and no more attempts to further curb the growth of budget-busting "entitlement" programs such as Medicaid and Medicare.

The 1990 budget deal -- tightened last year -- contained spending "caps." Those caps essentially require any new appropriations in discretionary spending to be offset by either tax increases or corresponding cuts in other discretionary programs.

So for everything the president wanted to add in his budget, he had to find something else to subtract. That might not please deficit hawks such as Ms. Cox Wait, but it seems a small step, at least, in the direction of real-world budget management.

Working out cuts

This year, according to Leon E. Panetta, director of Mr. Clinton's Office of Management and Budget, the president spent 15 hours meeting with every member of his Cabinet.

Some Cabinet secretaries, notably Les Aspin at the Defense Department and Henry G. Cisneros at the Department of Housing and Urban Development, argued strenuously against some of the cuts proposed for their agencies -- and were heard.

The defense budget, which many in the administration eyed covetously, was spared further cuts primarily because Mr. Clinton's advisers learned that the Senate, led by Sen. Sam Nunn, simply wouldn't go along.

Advocates for the homeless credit Mr. Cisneros with resisting deep cuts -- although he didn't get the increases he asked for.

"I think Secretary Cisneros has done a really good job to raise the profile of homelessness as well as fair housing," said Joan Alker, assistant director of the National Coalition for the Homeless. "But I think the bottom line is he is not going to be given too many resources to work with."

Clinton's pet projects

One factor in the preparation of Mr. Clinton's budget was his own pet projects. He has advocated spending more on AIDS research and on women's and children's health issues, including breast-cancer research, childhood-immunization programs, Head Start and the Special Supplemental Food Program for Women, Infants and Children (WIC), which provides milk and food to expectant mothers or those with babies.

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