Budget cutting to begin

March 12, 1995|By Karen Hosler | Karen Hosler,Washington Bureau of The Sun

WASHINGTON -- The House will vote this week on one of the most ambitious belt-tightening efforts ever attempted by Congress. Yet it's small change compared with the across-the-board shrinking of government that the Republican majority plans in the months ahead.

In this week's $17 billion installment of budget cutting, summer jobs for 600,000 youngsters would be wiped out. Housing subsidies for the elderly would be cut by a third. Emergency home-heating aid for the poor would end. Five proposed veterans medical centers would be canceled.

"It's a start," said Rep. John R. Kasich of Ohio, chairman of the Budget Committee. "But it's not going to get us where we need to go."

This first "down payment" on the Republican pledge to bring spending into line with revenue equals only 1 percent of the $1.7 trillion in savings the Republicans will need in order to balance the federal budget by 2002.

"It's really frightening when you look at all the cuts in people programs in this one bill and think about cuts 100 times as deep," said David Saltz, an AFL-CIO lobbyist.

The $1.7 trillion total reflects the Republican promise to wean the government from its reliance on the Social Security trust fund that masks the true size of the budget deficit. But it doesn't count the $200 billion worth of tax cuts that the Republicans unveiled last week.

"Now we know what all these budget cuts on children and the elderly are," said Rep. Richard A. Gephardt, the Democratic leader in the House.

"They are to fund a tax cut for the privileged few. This is not what we should be doing."

Mr. Gephardt was speaking for most Democrats in Congress, as well as President Clinton, who argue that the Republicans are forcing America's most vulnerable -- poor children, teen-age single mothers, the disabled, the elderly -- to cut corners in order to make the rich more comfortable.

House Republicans dismiss such talk as partisan hysteria. They argue that many of the proposals that have drawn the most attention -- in such popular programs as food stamps, school lunches and infant nutrition -- are not cuts at all, but simply reductions in the expected rates of spending increases.

"There is a lot of mass hysteria, a lot of Chicken Little-ness," said Rep. Robert L. Livingston Jr., a Louisiana Republican who chairs the House Appropriations Committee. "The fact of the matter is we are representing hard-working, average Americans who are tired of having the federal government dip into their pockets before they do."

But even some Democrats sympathetic to the Republican austerity drive say the majority party made a public relations mistake by proposing to cut social programs not just to meet the popular goal of eliminating the deficit but also to pay for tax cuts for the wealthy.

"The Republicans left themselves wide open for this; they led with their chin," said Rep. Charles W. Stenholm of Texas, a conservative Democrat who has been in the forefront of the drive for a balanced budget. "This is all because of the contract."

The House Republicans' "Contract with America," the campaign document credited in part for the election victory that gave the Republicans control of Congress, promises votes on nearly $200 billion worth of tax cuts within the first 100 days of the session.

Republican leaders have since promised that those tax cuts would be offset by savings elsewhere in the budget, partly through a reform of the welfare system.

In legislation being developed separately from the bill to be voted on in the House this week, those savings include $35 billion over five years in the main welfare program, Aid to Families with Dependent Children. An additional $16 billion over five years would come from savings in the food stamp program.

In addition, the school lunch program would be turned over to the states and would be limited to an increase of 4.5 percent a year, instead of rising with food costs and the number of students served.

Meanwhile, Mr. Livingston's Appropriations Committee came up with $20 billion by combing the current year's budget for unspent money -- the largest sum ever produced by such an effort.

Mr. Livingston's savings are represented in the bill in the House this week and a $3 billion defense-related measure passed by the House and pending in the Senate.

Half the $20 billion will pay for emergency spending, including disaster relief for California and humanitarian missions by the military in Haiti, Somalia and Rwanda.

But most, if not all, of the remaining $10 billion in cuts from the current budget -- for items such as housing, education, environmental and arts programs -- would be put toward the tax cuts.

Of the proposed tax cuts, the most expensive -- $105 billion over five years -- would be a $500-per-child deduction for families with incomes as high as $200,000 a year.

The second-largest, roughly equal to the savings from welfare reform, would come from reducing by half the tax rate on capital gains and other breaks for business.

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