WASHINGTON -- Lawmakers of both parties joined in a celebration yesterday for the long-awaited legislation to balance the budget and cut taxes that President Clinton formally unveiled on the South Lawn of the White House.
Flanked by liberal as well as conservative fellow Democrats, the president echoed Republican leaders in predicting that the legislation -- for two years the source of political strife -- would pass this week with wide majorities in both houses.
"After decades of deficits, we have put America's fiscal house in order again," Clinton declared.
Though he yielded to pressure from the Republican-led Congress to shrink the government, Clinton said he made sure )) that the package "honors our values, invests in our people and cuts taxes for middle-class families."
"It is a bipartisan victory," said House Speaker Newt Gingrich. "We join the president in working together to truly create a better future for all of us and our children."
The legislation represents a satisfying political victory for both parties. For Clinton, it could mean a legacy as the first president in a generation to shepherd a balanced-budget agreement through Congress.
For Republicans -- particularly Gingrich and many of his fellow House members -- the accord represents the crowning fulfillment of their 1994 pledge in the "Contract with America" to cut taxes and erase the budget deficit.
The legislation would rein in spending by $140 billion over five years to reach balance by 2002, even while cutting taxes by $94 billion and providing billions of dollars in new spending on education and health care for uninsured children.
This fiscal feat, which managed to meet the top priorities of both parties, was made possible by a galloping economy that is producing unexpected tax revenue for the government.
Republican leaders, who had announced the agreement once it was struck Monday night, assembled their jubilant troops on the steps of the Capitol yesterday, festooned with balloons and triumphant smiles.
"We don't have to sell it" to lawmakers, House Majority Leader Dick Armey said of the package. "This is pennies from heaven."
What little resistance there was yesterday came from the far right and far left, whose members found the many compromises in the bargain too much to swallow.
Sen. Phil Gramm, a conservative Texas Republican, opposed the provisions that would restore welfare benefits for many legal immigrants and apply the minimum wage and other worker protections to welfare beneficiaries who take publicly subsidized jobs.
But Gramm said he was more disappointed that the legislation includes none of the cost-cutting proposals for Medicare that would have raised premiums for high-income beneficiaries, lifted the eligibility age to 67 from 65 and charged a $5 co-payment for home health-care visits. Such reforms were approved in the Senate but were rejected by House negotiators.
"Medicare is not being strengthened in the long term," Gramm said.
The bill does reduce Medicare payments to doctors and hospitals by $115 billion -- the largest share of savings in the bill. But these steps don't deal with the additional Medicare costs that will arise when baby boomers start retiring.
Rep. Barney Frank, a liberal Massachusetts Democrat, took the opposite view: that Medicare should not be constrained at all but should be expanded. Like some other liberal critics, Frank also complained that the tax-cut package, which provides breaks for families, college students and investors, "adds to the inequities of the American tax system" by favoring the affluent over the poor.
Liberal isn't happy
In a scathing speech on the House floor, Rep. Peter A. DeFazio, a liberal Oregon Democrat, said of the package: "Cut up a fat hog, make wildly optimistic assumptions about the economy and revenues, cut social programs a little, don't take a penny out of the Pentagon and give a host of generous tax cuts slanted to the most wealthy in America and the largest corporations."
Rep. Richard A. Gephardt, the liberal House Democratic leader, issued a statement last night saying he remained sharply opposed to the legislation and would vote against it. Gephardt has been distancing himself from the Clinton administration to prepare for a presidential campaign against Vice President Al Gore in 2000.
For the vast majority of lawmakers, though, the budget package -- with its bonanza of new spending and tax cuts -- seemed all but impossible to resist.
"There's stuff in there that I hate on the spending side, but I can't believe how much we got on the tax cuts," said Rep. Robert L. Ehrlich Jr., a Baltimore County Republican.
By yesterday, the net tax-cut package had climbed to $94 billion -- $9 billion more than had been voted on earlier by the House or the Senate. It included not only a family tax credit of $400 per child next year and a capital gains tax cut (to 20 percent, from 28 percent, on the top rate), but also a plethora of other reductions.