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Congress Approves $1.7 Trillion GOP Budget

The Budget

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  • Social Security Special Report

  • By George Hager and Guy Gugliotta
    Washington Post Staff Writers
    Friday, March 26, 1999; Page A1

    The House and Senate last night approved nearly identical $1.7 trillion Republican budget proposals that would provide huge future tax cuts, increase spending for defense and education and devote a majority of projected budget surpluses to bolstering Social Security.

    With both chambers voting largely along party lines, the House approved its measure 221 to 208 and the Senate voted 55 to 44 to pass its version, clearing the way for Congress to leave for a two-week recess.

    House and Senate Republicans hope to iron out differences when they return in April, something they were unable to do last year when the two chambers split over tax and spending cuts.

    In practical terms, the GOP budgets approved yesterday are largely political documents that represent a first salvo in the yearlong debate between Congress and the administration over the shape of spending and tax policy.

    The GOP budgets are premised on a new era of rising surpluses that could total $2.6 trillion in the coming decade. The sharp differences between Republicans and Democrats over whether to return some of the surplus to taxpayers or to spend it on government programs likely will form the contours of the political debate through next year's election.

    While both parties broadly agree on setting aside the vast majority of the surplus to fund baby boomer retirements in the next century, Republicans want to devote the remainder to tax cuts.

    Democrats favored splitting the non-Social Security surplus among Medicare, extra spending on defense and domestic programs and a smaller package of tax cuts.

    The budgets provide the broad framework for spending and tax policy, with roughly a third going to the day-to-day operations of government and the remainder to cover the cost of major entitlement programs and interest on the national debt. Once the House and Senate agree on a final version of the plan next month, the most immediate task will be to pass 13 annual spending bills that keep the government going.

    The GOP budgets pledge to keep those bills below the strict spending caps set in the 1997 balanced budget deal. That is expected to make it tough to pass many of the bills, and it virtually guarantees a veto showdown with President Clinton if GOP leaders manage to move stripped-down bills to the White House.

    Lawmakers already have raised the specter of a year-end struggle and a repeat of the disastrous 1995-96 government shutdowns.

    GOP negotiators also will contend with Democrats over how and whether to overhaul Social Security and Medicare, both of which are projected to go broke in the next century. Prospects for major changes to those politically sensitive programs are rated as low this year, which could imperil plans by both parties to cut taxes, the final piece of the budget struggle this year.

    Intensive debate in the House and Senate over the past two days had Republicans trying to position themselves as the fiercer defenders of the nation's big retirement programs, insisting that their budget will set aside more money for Social Security and Medicare than the president's plan.

    "For the first time, we're going to keep our mitts off the money we collect for Social Security and Medicare," promised House Budget Committee Chairman John R. Kasich (R-Ohio), who also said the GOP would fight for a major tax cut. "The American people ought to have more money in their pockets," he said.

    Rep. Edward J. Markey (D-Mass.) said the GOP budget was "a complete fraud" that provided "hundreds of billions of dollars in tax cuts, mostly for the rich, but not a penny to extend the life of Medicare."

    GOP lawmakers in both chambers repeatedly emphasized that their chief priority was to make sure their budget set aside "every penny" of the booming Social Security surplus to help save that program.

    They hammered Clinton for what they said was a failed promise to do that, citing a Congressional Budget Office analysis that said Clinton's budget would spend Social Security money for the administration's proposed "USA" savings accounts, by investing a piece of the Social Security trust fund in the stock market and spending more money for day-to-day defense and domestic programs than the president claimed.

    The White House has said that its budget locks away the entire Social Security surplus over 15 years but does not deny that it spends some of that money in the early years before making up for it later on. In the growing battle over who is purer on this issue, though, it has become crucial to avoid spending any of that money in any year.

    In a clear sign that the Republican attacks were finding their target, Democrats abandoned the Clinton budget and proposed their own alternatives that set aside similar amounts of money for Social Security. The Senate voted 97 to 2 on Wednesday to reject the Clinton budget, and the House followed up yesterday with a 426 to 2 vote against the Clinton plan.

    Democrats in both chambers offered substitutes that would match the Republicans by reserving the entire Social Security surplus. In the House, the Democratic leadership and conservative "Blue Dog" Democrats offered alternative budgets that sought to trump the GOP plan in areas such as agriculture and education, but whose chief feature was a promise to lock up Social Security money. Both failed.

    © Copyright 1999 The Washington Post Company

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