July 30, 1997
CREDIT A ROBUST economy for a budget accord on Capitol Hill that has all the elements of a Christmas tree. Deficit hawks can point to the promise of a balanced budget within five years, assuming the economy stays strong. Meanwhile, tax-cutters can revel in the first significant tax cuts in a decade and a half. And advocates for children and the poor can point to significant victories in funding health care for uninsured children and in requiring welfare recipients who move into jobs to be paid the minimum wage.
Perhaps just as significant for the American people is the sight of Republicans and Democrats compromising and reaching agreement even earlier than they had anticipated -- not to mention the even more unexpected sight of Republican leaders describing the agreement as "tentative" so that President Clinton could share some of the credit upon returning to Washington from a cross-country trip.
Still, the question remains: Will the generous tax cuts come back to haunt the country in the form of widening deficits as the tax cuts take full effect several years down the road? That question gains urgency from the retreat on efforts to tackle problems in Medicare funding. Congress made some changes in Medicare but largely backed away from controversial proposals for shoring up the system into the next century. Instead, the task of dealing with those long-term issues was handed to a commission for further study.
But if this is not a perfect budget (and no budget is), and if it has prompted more than the usual share of self-congratulatory rhetoric, at least it offers something for just about everyone. Investors get a hefty cut in capital gains taxes, but less well-to-do Americans can point to a new tax credit for families with children under 18, as well as tax breaks for educational expenses. Even the working poor get to share in the child tax credit, which at Democrats' insistence can be used to offset payroll and Medicare taxes for workers who don't make enough to owe much income tax.
All these provisions and compromises will cost money in future years, especially if the economy takes a downward turn. But, at least for now, many Americans will consider the fine print less important than the fact that Congress and the president, Republicans and Democrats, were able to work together, demonstrating that they can sometimes act as if they are actually as interested in governing the country as in grandstanding.
Pub Date: 7/30/97
