Congress OKs blueprint for balancing budget Effort falls far short of GOP's original plan for cutting spending, taxes

June 14, 1996|By Karen Hosler | Karen Hosler,SUN NATIONAL STAFF

WASHINGTON -- The Republican-led Congress gave final approval yesterday to a blueprint for balancing the federal budget by 2002 that falls far short of the GOP's original plans for cutting spending and taxes and would actually increase the budget deficit in the first two years.

Republicans acknowledged their disappointment but said they were trying to work within the realities of an altered political climate. The Clinton White House not only blocked their more far-reaching proposals of last year but also helped stir voter resistance to them.

"If I were king, I wouldn't write this budget," Sen. Pete V. Domenici, the New Mexico Republican who is chairman of the Budget Committee, said before the Senate voted 53-46 strictly along party lines to approve the proposal.

"But we don't have kings in this Congress. I believe this is as good as we can do it right here."

The new plan, a paler version of the Republicans' sweeping effort last year to shrink the federal government, cut taxes and balance the budget, sets only broad outlines for allocating money and does not require the president's signature.

But it is a political document that sets forth the guiding plan for later action on individual spending bills, tax measures and the overhaul of the welfare, Medicare and Medicaid systems, which will be fiercely debated through the fall elections.

Democrats have served notice that Clinton stands ready to veto legislation that would put these policies into law, as he did with many of the Republican budget measures last year.

"What we ought to be doing is negotiating with the White House" to produce a bipartisan budget agreement, said Tom Daschle of South Dakota, the Senate Democratic leader. "Instead, Democrats have been locked out of the process."

The latest Republican plan would save an estimated $580 billion over six years to achieve a balanced budget by 2002. But annual deficits would rise by a total of $40 billion over the next two years -- the first deficit increases since Clinton took office.

There was also a small rise in the deficit in the first two years of the Republican budget last year, but the gap has grown larger and more politically embarrassing to some Republicans.

In the blueprint approved yesterday, Democrats attribute the shortfall to a $122 billion package of proposed tax cuts, featuring the $500-a-child tax credit that Republicans have been pushing for two years.

The size of the tax-cut package is less than half that of last year's Republican proposal. Republicans have also reduced the amount of savings they want to extract from Medicare, in hopes of stemming political damage caused by Democratic charges that the Republicans are out to destroy that program for the elderly.

Trent Lott, presiding over his first vote as Senate majority leader, argued that Clinton's balanced-budget plan also calls for higher deficits in the first two years and similar curbs in the growth of Medicare spending.

The two plans differ sharply on tax cuts, but the Mississippi senator said, "I don't apologize at all for wanting to help families with children. Whose money is it, anyway? It's the people's money."

While Democrats complain that this new budget blueprint still looks too much like the spending and tax-cut plan Clinton vetoed last year, many Republicans complain that it now doesn't go far enough.

The House passed the proposal Wednesday night by 216-211, only after House Speaker Newt Gingrich of Georgia persuaded four Republican hard-liners to switch their votes.

"I cannot emphasize how strongly I feel about this," said Rep. Mark W. Neumann, a freshman Republican from Wisconsin who pleaded with his colleagues to have "the courage of their convictions" and defeat the budget plan.

"I had a great business going out there in the private sector, and I could still be doing that business," he said.

"But I came to this city because I knew that Congress had to be different if we were actually going to balance the budget."

In the end, only 17 of the 73 House Republican freshmen defected on the budget vote Wednesday. But there will be many chances in the next few months for the hard-liners to push for deeper cuts in spending bills.

Pub Date: 6/14/96

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