Clinton sets spending at $1.8 trillion

Budget proposal on health care, debt, taxes, environment

Fruits of growth, surplus

Republicans see election-year gambit and vow resistance

February 08, 2000|By Karen Hosler | Karen Hosler,SUN NATIONAL STAFF

WASHINGTON -- As his opening bid in this year's budget debate, President Clinton proposed yesterday a $1.84 trillion blueprint for government activism made possible by robust economic growth and a windfall of surplus tax revenue.

Republicans leaders complained that Clinton's plan seemed to suggest every use for the budget surplus except to return it to taxpayers -- and they called it an election-year gambit to help Democrats in November.

They pledged to block his most ambitious new proposals, though they could find it difficult to resist plans to boost spending on popular programs.

One last-minute item added to the president's long list of spending initiatives, in this last of his eight budgets, is a prescription drug program for older Americans that could bring high-cost medications within their reach.

Other major proposals seek -- along with a variety of other goals -- to expand health insurance coverage for the working poor, combat youth smoking, preserve wildlife and farm lands, reverse global warming, close the digital divide, cut taxes on families and eliminate the federal debt by 2013.

"This budget makes really strong and significant steps toward achieving the great goals that I believe America should pursue in this new century," the president told a White House gathering.

Arriving from New York, where he had helped launch wife Hillary Rodham Clinton's Senate bid, Clinton trumpeted the role of his administration in reversing the course of federal spending from decades of deficits to record surpluses.

Clinton has also set targets in this last budget to allow current spending to grow above spending caps adopted in 1997, thus shrinking the size of the projected surplus that Republicans would like to use mostly for tax cuts.

With the extra breathing room for current spending, Clinton is projecting a 10-year surplus of $746 billion -- not counting an additional $2.2 trillion surplus expected over the decade in Social Security revenue.

"Frankly, what we're doing in this year's budget is restoring levels in some programs" that have been squeezed in recent years because of the restraints imposed to reach a balanced budget, said Jack Lew, the White House budget director.

Republican congressional leaders dismissed the president's budget as little more than a grab-bag of costly items designed to help Democrats retake Congress and help elect Vice President Al Gore to the presidency.

"It's not really intended to be passed," Sen. Pete V. Domenici of New Mexico, the chairman of the Senate Budget Committee, said of Clinton's budget proposal.

"It's intended to offer an opportunity for Democrats to get elected using parts of this budget, and perhaps for Al Gore to use in his election campaign."

Rep. John R. Kasich of Ohio, the chairman of the House Budget Committee, called Clinton's proposal a "fantasy budget." He said the president had "failed to make basic choices, promising more spending on every government program."

If past practice is a guide, most of the president's routine spending proposals will pass almost intact.

The more ambitious items -- Clinton's $110 billion plan to provide health coverage to the working poor through Medicaid, for example -- are unlikely to be approved this year but could set the stage for budget debates in years to come.

Probably the first and most vexing issue to be decided will be where to draw the line on current spending so the two sides can agree on a common figure for the surplus.

Republican leaders, who had to use a variety of bookkeeping gimmicks to meet the 1997 spending ceilings last year, agree that lawmakers will not restrict spending enough to meet those ceilings this year. But Republicans are still arguing among themselves about how much additional spending to allow.

On policy issues, one of the sharpest debates is likely to come over how to provide a prescription drug benefit for Medicare recipients.

In this year's budget, Clinton has expanded upon a proposal offered last year, but ignored by Congress, that would make a drug benefit available to Medicare recipients for $26 a month. Low-income beneficiaries would pay a reduced premium or none at all.

The benefit would cover the cost of half of all prescriptions, up to a maximum of $5,000 per year. Taxpayers would subsidize the program at a cost of $160 billion over 10 years.

A major new feature would create a $35 billion Medicare reserve fund, beginning in 2006, to be used to help defray the cost of highly expensive drugs that would cause beneficiaries to exceed the $5,000 annual maximum.

"This is a welcome addition," said Patricia Smith of the American Association of Retired Persons. "It helps point out that this problem is not just affecting low-income people."

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