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Jewish World Review Sept. 9, 1999 /28 Elul, 5759

Morton Kondracke

Kondracke
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Econophone

Budget makes 2000 an `issues' election


http://www.jewishworldreview.com -- POLITICS, MATH AND THE CALENDAR all suggest there won't be a comprehensive, 10-year budget deal this year, but rather a one-year pact and an issues-rich election in 2000. It's probably for the best.

Instead of having the nation's $1 trillion non-Social Security surplus divvied up and tax, Medicare and spending policy settled for the next decade in a hasty, end-of-session negotiation, these issues can be the subject of extensive national debate, with presidential candidates weighing in.

Officially, the White House and House Speaker Dennis Hastert, R-Ill., insist that negotiations on a comprehensive deal can commence once President Clinton vetoes the Republicans' $792 billion tax cut later this month.

However, most other Republican leaders -- including House Majority Leader Richard Armey (Texas), House Majority Whip Tom DeLay (Texas) and Senate Majority Leader Trent Lott (Miss.) -- are said to think that negotiations would be fruitless.

GOP leadership aides interpret the White House's intensive August barrage against the tax plan as evidence that Clinton is "beating us up" over taxes, not looking for a deal.

"Democrats openly say they'd rather have an issue than a deal," one top House GOP leadership aide said last week. "We think Clinton is with them. He owes them, after all."

Indeed, Clinton and other White House aides don't mention the tax cut without using the word "risky" as though that were part of its title, and they've sent out spokesman after spokesman to detail the dire consequences it would produce.

On Aug. 25, the White House issued a report claiming that the GOP tax package would trigger across-the-board cuts in mandatory spending, including $41 billion from Medicare and $19 billion from farm programs, and would eliminate veterans retraining, student loans and social services block grants.

President Clinton followed up with a letter saying that the tax cuts also "would reverse the fiscal discipline" that's been key to U.S. prosperity and would raise interest rates.

"The tax bill would spend 100 percent of the non-Social Security surplus," Clinton added, and would "require nearly 50-percent cuts in essential government functions, including everything from education to air traffic control to the FBI."

Republicans denounced the Clinton claims as outrageous, and Hastert and Lott defended their plan as "common-sense tax relief," saying Clinton had no "honest reason" to veto it. Republicans touted polls indicating the public supports the tax cut, although only one seems to have been taken during the August recess.

That poll, by Rasmussen Research, showed the public favors the cut by 50 to 29 percent and, after Clinton and GOP claims about it are explained, continues to favor the cut by 50 to 34 percent.

The White House pooh-poohed the poll, claiming it did not adequately explain the consequences of the plan or the fact that benefits would go primarily to wealthier Americans.

White House aides also asserted that news reports and editorials around the country during the break indicated scant support for the tax cut.

Claims, counterclaims and rhetoric don't mean a deal isn't possible, of course. Angry-sounding noise often is a precursor to negotiation.

However, a deal would require GOP members to compromise on the size of a tax cut, and right now the highest numbers the White House is talking are "300-plus," that is, $300 billion to $400 billion, a drastic come-down from the $792 billion in the GOP bill.

It will be hard for GOP members to swallow a Clinton-sized tax cut, but the mathematics of the situation indicates that anything larger would squeeze out other priorities.

The Congressional Budget Office estimates the non-Social Security surplus at $996 billion over the next 10 years. To protect existing government programs from inflation will cost $595 billion, leaving just $400 billion for tax cuts and/or new programs unless large-scale cuts are imposed.

In fact, the $996 billion includes $150 billion in interest savings, so the "spendable" amount comes down to $250 billion -- not enough for big tax cuts and the Medicare increases that Clinton is proposing, which CBO estimates to be $111 billion.

Math and politics aside, it's hard to see how a budget deal can be processed in the time remaining before Congress adjourns, especially since that will involve complicated legislating over Medicare, defense and other spending.

Democrats and the Clinton administration want to provide a prescription drug benefit for all seniors. Republicans want it only for lower-income seniors -- and only in the context of market-based reforms in the whole Medicare system.

The Senate Finance Committee is scheduled to begin deliberating Medicare later this month and theoretically could get a bill to the floor in October, but it's hard to see the House processing such a bill this year.

With only one of the required 13 appropriations bills signed by the president so far, Congress will have enough trouble trying to get the government funded for next year, let alone undertaking complicated negotiations for 10.

So the likelihood is for a bang-up debate in 2000 over the surplus, tax cuts, spending priorities and Medicare. It beats having elections hinge on "character" and scandal.



JWR contributor Morton Kondracke is executive editor of Roll Call, the newspaper of Capitol Hill. Send your comments to him by clicking here.

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