Senate GOP budget plan rejects Clinton's spending proposals Tax cuts are smaller than some in party want

March 18, 1998|By NEW YORK TIMES NEWS SERVICE

WASHINGTON -- The chairman of the Senate Budget Committee proposed a Republican fiscal blueprint for next year yesterday that rejects nearly all of President Clinton's calls for increased domestic spending but provides smaller tax cuts than sought by many Republicans.

The proposal from Sen. Pete Domenici of New Mexico is the first detailed GOP budget plan this year and appeared likely to be adopted more or less intact by the committee this week over Democratic opposition.

If approved by the full Senate, it would serve as the chamber's broad tax and spending template as it confronts the first federal budget surpluses in a generation and begins grappling with the long-term financial crises facing Social Security and Medicare.

The plan calls for federal spending of $1.73 trillion, an increase of 3.6 percent over this year, but turns aside the White House's proposals for new education, child care and health care initiatives.

It provides for tax cuts worth $30 billion over five years, about half what the GOP's more ardent tax cutters have been `f demanding. It goes along with the administration's insistence that any budget surpluses be set aside until the nation agrees on a way to shore up Social Security, which will run short of money as the baby boom generation retires.

White House officials said Domenici's plan attacked the core of their plan to help families by improving public schools and providing more day-care assistance.

"This budget squeezes out education and squeezes out children," said Gene Sperling, the White House's economic policy adviser.

One of the Domenici proposal's main features is earmarking any proceeds from a legislated settlement with the tobacco industry over the illnesses caused by smoking to help Medicare, the health insurance program for the elderly. Although there is no assurance that Congress and the industry will come to terms on a deal, Clinton's budget proposal allocated $65 billion in anticipated proceeds from any settlement largely to his new spending plans, including $21 billion in new funding for child care over five years and $7.3 billion to reduce class sizes.

Domenici said that because 14 percent of Medicare's expenditures go to treat smoking-related illnesses -- about $30 billion a year -- any tobacco settlement proceeds should go to averting the financial problems that Medicare will face as the population ages.

"That's the program that's most justified in having that money," Domenici said in releasing his plan at a budget committee hearing.

Pub Date: 3/18/98

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