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GOP Tax-Cut Plans Open Hill Debate

The Budget
By George Hager
Washington Post Staff Writer
Thursday, March 18, 1999; Page A4

Republicans began muscling their fiscal 2000 budget through twin congressional committees yesterday, rejecting attacks that it would shortchange Medicare to provide tax cuts and killing Democratic attempts to delay or scale back those tax cuts.

The House Budget Committee approved the GOP plan last night on a 22 to 18 vote after committee Chairman John R. Kasich (R-Ohio) presented a House Republican budget that – like the Senate proposal laid out a day earlier – would cut taxes by nearly $800 billion over the next 10 years, boost spending for defense and education and require Congress to stick to tight spending caps set in the 1997 balanced-budget agreement. The Senate Budget Committee could complete work on its version today.

Insisting his budget would lock away more money for Social Security than a competing plan by President Clinton, Kasich called his offering "an excellent budget for the Republican Party to support." He predicted it would gather substantial Democratic support when the House takes it up next week.

But Democrats disagreed, maintaining that Kasich had cooked numbers throughout the document to make it look as if Republicans could increase spending for defense and education while living under the spending limits. "Surely this is not the real budget," said Rep. John M. Spratt Jr. (S.C.), senior Democrat on the House Budget Committee. "I don't think it'll be enacted and implemented."

Disagreement over the budget broke into two areas yesterday as the House and Senate budget committees worked to pass the measures: an often emotional debate over the volatile connection between tax cuts and Medicare and a more immediate dispute over how Congress will craft its spending bills this year.

In a virtual replay of the devastating attacks they launched at GOP budget proposals in 1995, Democrats charged yesterday that Republicans were pilfering Medicare to pay for tax breaks that would go largely to the wealthy.

Clinton had proposed setting aside roughly $350 billion over the next 10 years to save the ailing health care program for the elderly, but Senate Republicans proposed putting away $133 billion and House Republicans some $97 billion. Neither GOP budget earmarked the money exclusively for Medicare.

The GOP budget "doesn't guarantee a single extra dollar for Medicare," said Sen. Frank R. Lautenberg (D-N.J.). Republicans responded that Clinton's plan would make no real changes to save Medicare but would instead load more IOUs into the program's trust fund. "To say the president is somehow saving Medicare deserves the Pulitzer Prize for fiction," said Sen. Olympia J. Snowe (R-Maine).

And Republicans charged that Democrats want to slash or kill the tax breaks the GOP has vowed to make its signature political issue this year. "We're willing to take this one to the American people when the time comes," said Senate Budget Committee Chairman Pete V. Domenici (R-N.M.), shortly before his committee voted 12 to 10 along party lines to kill a Lautenberg amendment to defer tax cuts until Congress had extended the solvency of Medicare and Social Security. A similar amendment died on a party-line 23 to 19 vote in the House Budget Committee.

In a debate that will have a more immediate effect on Congress' day-to-day spending decisions, Democrats charged that the Republican plan for sticking with tight spending caps is unrealistic and dangerous. The White House released an analysis that it said showed the GOP budget would force cuts in key domestic programs of 12 to 20 percent.

"It implies reductions of thousands of FBI agents, hundreds of Border Patrol agents," said White House budget director Jacob Lew. "I'm less predicting that these things would happen than I'm saying I don't think it's feasible."

Although Domenici and Kasich had suggested earlier this year that Congress would have to find a way to break the caps, GOP leaders concluded that they had no choice but to stick with the limits, in part because breaking them in fiscal 2000 would spend Social Security surplus funds Republicans have vowed to protect.

Both Domenici and Kasich now cast the decision to live with the caps as necessary fiscal discipline, though they shy away from detailing all the spending cuts lawmakers will have to make to do that. "You cannot stick to the caps and fund every program of the federal government with increases," said Domenici, who chairs the Senate Appropriations subcommittee that will have to produce a bill later this year to fund programs for energy research and dams, levees and dredging.

The irony that lawmakers are fighting over spending cuts at a time when the budget is producing large and growing surpluses was not lost on some of the debaters yesterday. "I'm impressed with how difficult it is to manage the surplus," said Sen. Charles E. Grassley (R-Iowa). "It's almost as difficult as managing the deficit."

© Copyright 1999 The Washington Post Company

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