May 03, 1997
ONLY A Democratic president who had proclaimed the end of big government and a Republican congressional leadership with mint-quality conservative credentials could have put together the balanced budget deal announced yesterday.
The left and right fringes of their parties will fight it, and so will some of the mainstream. Months of hard bargaining lie ahead. At the end will come a series of trade-offs and compromises that may balance the budget in 2002 but could open the way to astronomical deficits thereafter.
On the positive side, the accord attempts to deal with the surging costs of Medicare and Medicaid entitlements that have emerged as the government's most intractable budget-breakers. An inflated Consumer Price Index that has been unjustifiably expanding entitlement benefits for years will be lowered, perhaps 0.3 percent, by technical means designed to give incumbent politicians cover. In addition, direct savings will be achieved by reducing payments to hospitals and other health care providers and increasing affluent beneficiaries' premiums for Medicare Part-B physician care.
But to administer such bitter pills, which are likely to lower the growth rate of Social Security benefits as well, President Clinton and the Trent Lott-Newt Gingrich Republican leadership group have provided ample sweeteners.
Mr. Clinton will get added funds for higher-education assistance, health insurance for 5 million uncovered children and some welfare give-backs for immigrants hurt by last year's reform legislation. The GOP leaders will get hefty cuts on capital gains taxes, estate taxes and -- the only progressive element -- a $500 child credit for lower-income families.
All this, plus some $200 billion in unforeseen revenues generated by a booming economy, will add up to a plan that ostensibly will balance the budget in five years. But if the coming debate is to achieve lasting significance, it should also focus national attention on what comes after.
It benefits the country little if the deals put together to accommodate incumbent politicians only add to the huge deficit burdens projected when baby boomers will be retiring and their grandchildren overload the nation's education system.
President Clinton said in a meeting with somber Democratic lawmakers in Baltimore yesterday that provisions were made in the tax-relief package to prevent a deficit "explosion" in the years between 2002 to 2007. This is not an assurance that should be taken on faith; it is an assurance both he and the Republican Congress must be made to honor.
As for jubilant Republicans, who treated the balanced budget announcement as a victory rally, they lavished so much praise on White House negotiators that the wariness of Democratic liberals is likely to increase.
Nevertheless, politics is the art of the possible. While strong arguments could be made against tax cuts and spending increases that will worsen budget problems, the reality is that they are the only means of pushing and prodding an agreed package through Congress. Key to final passage will be "deficit hawk" Democrats whose votes will be needed to offset liberal opposition in their own party and on the Republican right.
A successful result is not a given. House minority leader Dick Gephardt, a probable rival to Vice President Al Gore for the next Democratic presidential nomination, was sulking in St. Louis while such lieutenants as Reps. David Bonior and David Obey were assailing the White House in Washington.
But even Mr. Gephardt softened, according to the president, when the revenue bonanza provided $26 billion in added domestic spending and he succeeded in eliminating a GOP demand for another capital gains tax break -- this one to index gains to offset inflation.
On the Republican side, such election-year 2000 hopefuls as Jack Kemp and Phil Gramm were assailing Senator Lott with the kind of rhetoric right-wingers once turned on President George Bush. Mr. Kemp, the 1996 Republican vice-presidential candidate, said the GOP surrender on the indexing issue was "unconscionable" and "unacceptable."
Indeed, the transformation of Mr. Lott from arch-conservative to a Bob Dole-style deal-maker has taken Washington by surprise. The Mississippi Republican's action on the budget came only a week after he assumed presidential tones in pushing through ratification of the Chemical Weapons Convention.
Voters should reserve judgment on the budget deal until all the devilish details come out, long-range impacts are fully measured, back-loading exposed, and the cats and dogs hidden in massive legislation detected and chased away. Only if such a cleansing exercise is executed successfully can the American public feel assured that the Clinton-Lott-Gingrich combine has done something meaningful about the government paralysis of the past two years and the government profligacy that threatens the nation's future.
Pub Date: 5/03/97
