Jewish World Review Oct. 18, 2000 / 19 Tishrei 5760
While Bush, Gore debate
Congress spends it
WHILE THE PRESIDENTIAL candidates are debating how to carve up the
anticipated budget surplus, Congress and President Clinton are busy
spending it - to the point where some experts wonder whether there'll be a
The Concord Coalition, for instance, warns that if discretionary spending
keeps growing at the same rate it has over the past three years, the
10-year non-Social Security surplus won't be $2.2 trillion, as expected, but
"That's a good sum of money," said the Coalition's executive director, Bob
Bixby, "but it's far less than the cost of the presidential candidates'
Vice President Al Gore proposes spending increases and tax cuts -
mainly spending increases - that his campaign totals up at $1.4 trillion.
Texas Gov. George W. Bush (R) proposes programs worth $1.9 trillion -
mainly in the form of tax cuts.
In each case, though, there's a dispute whether the estimates are
accurate. Gore puts the cost of his "Retirement Savings Plus" entitlement
at $200 billion, but Republicans say it could be $750 billion. Democrats
accuse Bush of underestimating his tax cuts by $300 billion.
Disputes aside, the fact is the Congressional Budget Office's estimate of
the 10-year on-budget surplus was based on the idea that discretionary
spending would grow at the rate of inflation, or 3 percent per year.
Instead, according to Bixby, it's been growing at 5.5 percent - a rate that
would chew up $1.4 trillion of the CBO's estimated $2.2 trillion.
CBO calls for discretionary spending to decline as a percentage of the
gross domestic product from 6.2 percent in the current fiscal year to 5.2
percent by 2010. At current rates of spending, Bixby figures, it will grow to
Of course, these pessimistic calculations may be offset by new and rosier
CBO projections based on continued strong growth in the economy.
CBO based its surplus projections on a 10-year economic growth average
of 2.7 percent. If that is raised to 3 or 3.3 percent, it could add $500 billion
to $1 trillion to the new estimate posted in January, leaving more room for
spending and/or tax cuts.
However, as Democrats on the House Budget Committee note, Congress
isn't only increasing discretionary spending but mandatory spending, as
Whereas CBO projected fiscal 2001 outlays at $638 billion, and the
Republican budget resolution promised to hold spending down to $612
billion, actual outlays are headed for the neighborhood of $650 billion or
On top of that, the Democrats observe, Congress is on its way to enacting
tax cuts and mandatory spending increases that could total nearly $300
billion over 10 years, which would further reduce the surplus.
The mandatory items passed or likely to pass include $62 billion in health
care improvements for military retirees, $50 billion in Medicare "givebacks"
for health providers, $55 billion for a telephone excise tax repeal, $15
billion for railroad retirement benefits, $20 billion for community-renewal
incentives, $20 billion for business tax cuts and $80 billion in lost interest
A Medicare prescription drug benefit probably won't pass this year, but
when it does, the likely cost will be around $350 billion over 10 years.
So, who's responsible for all this spending? Naturally, massive
finger-pointing is under way, though it's hard to argue with the proposition
that Congressional Republicans have failed to hold the line as they
Rep. John Spratt (D-S.C.), the ranking member of the House Budget
Committee, asserts that all of the first five appropriations conference
reports approved this year have exceeded President Clinton's requests by
Republicans on the House Appropriations Committee say the Democratic
numbers are wrong, but don't deny spending has exceeded Clinton's
Partly, they say, that's because Clinton has raised the ante in
late-session negotiations, partly because the GOP has made policy
decisions to increase defense, wildfire control and transportation, and
partly because Clinton purposely underfunded certain programs when he
submitted his budget.
On the plus side, Republicans and Democrats have agreed not to spend
current Social Security and Medicare tax surpluses - reducing the national
debt by $150 billion to $200 billion a year, lowering interest rates and
helping the economy grow.
On the minus side, though, they've done nothing to reform these programs
so they can survive the retirement of the baby boom generation.
And as Bixby and former CBO chief Bob Reischauer of the Urban Institute
point out, Members are on their way to spending and obligating most or all
of the non-Social Security surplus before they're sure it will materialize.
"Today's politicians," Reischauer observed, "shouldn't dissipate all the
country's fiscal flexibility for the next decade." That applies both to
presidential candidates and
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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