Daunting are the details of GOP budget blueprint

June 24, 1995|By Karen Hosler | Karen Hosler,Washington Bureau of The Sun

WASHINGTON -- Congressional Republicans appear to have reached a consensus on how to achieve the extraordinary feat of balancing the budget while also cutting taxes. But don't start spending those tax refunds just yet.

The seven-year budget blueprint, expected to win endorsement by the GOP-controlled House and Senate next week, is another step toward cutting taxes and shrinking government, with the thorny details yet to come.

"It's pretty obvious that we've got three months of hard work ahead of us," said Republican Sen. Pete V. Domenici of New Mexico, chairman of the Senate Budget Committee. "And we could pass all these gigantic reforms and spending cuts only to have the president veto them."

Only the broadest outlines of the budget deal reached Thursday night by House and Senate Republicans leaders will be binding on Congress. All the details -- on tax cuts, spending cuts and program changes such as welfare reform -- must still be ironed out, one by one, in separate legislation subject to President Clinton's disapproval.

While Democrats cannot block approval of the budget blueprint next week, Sen. Jim Exon, a Nebraska Democrat, said they are bracing for countless skirmishes later over the specifics. Most Democrats say the Republican spending cuts are unnecessarily harsh on the neediest Americans in order to pay for tax benefits for the wealthy.

"Once the American people find out what's in this historic document, they will make it history indeed," Mr. Exon warned.

Mr. Clinton, who recently offered his own plan -- ignored by the Republicans -- for balancing the budget within 10 years, complained yesterday that the GOP proposal "is still too extreme."

The White House contends that Republican cuts are deeper than necessary because Congress is taking too pessimistic a view of economic growth over the rest of the decade. Even small differences in these projections -- about such elements as inflation and interest rates -- can produce enormous gaps in budget plans that extend over many years.

Just to be on the safe side, though, elderly Americans might want to start putting aside a little extra for Medicare premiums. Young people should look for ways to pay for college without student loans. And employees of the imperiled Commerce Department would be wise to start looking for another job.

ZTC Those are just a few of the thousands of adjustments in everyday life that will have to be made if Congress manages to translate the Republican budget blueprint into reality.

"The hard part is going to be . . . to take that blueprint and put it into real numbers," said Senate Democratic leader Thomas A. Daschle of South Dakota. "Those real numbers have extraordinary ramifications on every aspect of federal activity directly affecting the lives of virtually every American.

But noting that the Republicans so far have advanced their agenda by voting in lock step, he acknowledged: "I think it is possible that the Congress could do the hard part. I wouldn't say probable, but certainly possible."

In the flush of their election victory last year, the Republicans chose to pursue the ambitious task of grinding new federal spending almost to a halt to reverse decades of deficit spending.

"This is something we are in dire need of, to put our fiscal house in order," said Sen. Judd Gregg, a New Hampshire Republican.

Now, after months of effort, House and Senate negotiators have produced a plan to cut the growth of spending by $898 billion over seven years to reach a balance by 2002.

Overall federal spending would increase by 3 percent during that period, to a total of $1.875 billion, less than half the current growth rate of about 8 percent.

Medicare, the highly popular health care program for the elderly, would absorb the lion's share of the cuts -- $274 billion over seven years. Perhaps the most difficult task the Republicans face is winning approval for the specific Medicare changes necessary to wring out those savings.

The lawmakers hope to get most of the money from limiting doctor and hospital fees and other medical-provider costs. But they acknowledge that it will also probably be necessary to raise the premiums and co-payments for the elderly, and to reduce benefits.

Republicans contend that reforms in Medicare are needed to save the fast-growing program from bankruptcy, now projected to occur in 2002. But the budget blueprint promises to keep Medicare solvent only until 2005.

The proposed Medicare savings nearly match the size of the $245 billion that would be set aside for tax cuts -- a point that has not been lost on the Democrats, who complain that the Republicans are robbing from the poor and the elderly in order to pay for tax breaks for the rich.

An additional $182 billion in savings outlined in the Republican plan would come from Medicaid, the health care program for poor. The budget calls for slowing the growth of Medicaid to 4 percent annually, from its current 10.5 percent, and for turning the money over to the states in lump sums.

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