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Jewish World ReviewNov. 1, 1999 /21 Mar-Cheshvan, 5760

Morton Kondracke

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GOP, Clinton could reach deal swiftly -- HAVING FAILED to fix any of the country's long-term problems this year, Congress and President Clinton now should reach a quick one-year budget deal -- before they stumble into a government shut-down and do real damage.

The Republicans and Clinton have failed to reform Social Security and Medicare or enact a patients' rights law, gun control or tax cuts, but they can at least fund the government for fiscal 2000 without a breakdown.

For all their finger-pointing and posturing, the two sides actually are not very far apart on money, and a deal would enable both to say they'd paid down some national debt and "saved" Social Security -- at least for a year.

Instead, because of personal animus and political one-upsmanship, Clinton and the Republicans are playing budgetary "chicken," risking multiple vetoes and, possibly, a partial government shutdown.

Clinton definitely plans to veto some appropriations bills. A shutdown could happen if the two sides get angry and stubborn and the president refuses to sign a continuing resolution designed to keep the government operating while budget negotiations proceed.

There are policy differences separating the two sides -- notably over education, the environment and foreign aid -- but these ought not be insurmountable. In fact, they will be surmounted eventually. The questions are: when and after how much political bloodshed?

The sides are posturing most -- and at their silliest -- over who'll be to blame if some Social Security surplus money gets spent this year. The truth is, no one will dip very deeply into the surplus, and ultimately it may not be necessary to dip at all.

Thanks to economic prosperity, the government will run two surpluses this fiscal year.

Payroll tax revenues will exceed Social Security outlays by around $160 billion. Income taxes will exceed other government outlays by an amount the Congressional Budget Office estimates at $14 billion and the White House Office of Management and Budget puts at $5 billion.

Instead of celebrating and calmly divvying up the bounty, though, Congress and the White House are at war over who's to blame if any Social Security money gets spent.

CBO calculates that House-passed appropriations bills have overrun the non-Social Security budget surplus by $13 billion; Senate bills, by $22 billion; and the White House budget, by $19 billion.

These are the amounts, according to CBO, that would have to come from Social Security surpluses. They aren't very big and there isn't much difference between them.

But wars start over little things and right now each side is doing its utmost to erase evidence of its own need to dip into Social Security and to embarrass the other side.

For instance, Republicans use CBO's estimate of the non-Social Security surplus, but they switch to White House Office of Management and Budget numbers to calculate defense outlays and revenue from broadcast spectrum sales. OMB's data conveniently cut Congress' Social Security-dipping by $18 billion.

The White House, on the other hand, estimates the non-Social Security surplus at only $5 billion and insists that tobacco taxes have to be raised, Medicare cut and various "user fees" raised to avoid raiding Social Security.

Rather than do any of that, Republicans say they'd rather cut spending across the board to make the numbers come out. The administration says that's unacceptable.

So, the stakes are escalating. The Republicans, fearing they might get snookered in face-to-face "omnibus" funding negotiations with Clinton, decided to pass funding bills one by one, dealing with vetoed bills in isolation.

In response, the White House is holding some bills hostage, intending to force Republicans into "comprehensive negotiations" in order to get its way on foreign aid, environmental provisions and funding for teachers and police.

"This is just nuts," said one congressional budget expert. "The policy differences amount to less than $1 billion. They are very close on funding. If there's a $10 billion difference, it's only an estimate. It's all very technical. And we could be wrong. We've been off some years by $10 billion a week!

"It's easy to see how they could sit down for an hour and reach a deal. But this kabuki is not about money or even policy. It's about personalities and blame."

One easy way out has been suggested by Rep. David McIntosh, R-Ind.: a mechanism to determine next March, six months into the fiscal year, whether some Social Security surplus money is likely to be spent and, if it is, to hold up or "sequester" certain spending to avoid it.

The chances are, said one budget expert, that increased economic growth in the fourth quarter of 1999 will produce sufficient revenues to swell the non-Social Security surplus and eliminate any need to raid Social Security or sequester spending.

The fact is, no one but a maniacal Beltway wonk cares whether Congress uses CBO or OMB scoring on funding bills or whether the non-Social Security surplus is exceeded by $10 billion or $20 billion out of a federal budget of $1.8 trillion.

The public will notice, though, if the government gets shut down. Before that happens, Congress ought to cut the best deal with Clinton it can -- and go home.

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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