Budget Special Report
Navigation Bar
Navigation Bar

THE BUDGET
 Overview
 Key Stories
 Opinion
 Game
 Glossary
 Links &
 Resources
 Talk
 Special
 Reports

  blue line
Clinton to Seek More for Emergency Spending

The Budget
By Eric Pianin and George Hager
Washington Post Staff Writers
Thursday, September 2, 1999; Page A8

President Clinton plans to seek an additional $12 billion or more in emergency funding this month for American farmers and for international aid and relief, raising the budget pressures facing lawmakers as they return from their August recess.

While both parties continue to pledge fiscal responsibility, independent analysts said the pending request all but ensures that Congress and the administration will break their repeated promises not to dip into Social Security funds to finance the rest of the government next year.

The administration is preparing new spending requests that could match the $7.4 billion in farm aid already approved by the Senate, while providing an additional $3 billion to $4 billion for peacekeeping and humanitarian efforts in war-torn Kosovo and $100 million to $300 million for earthquake relief in Turkey. The White House also will resubmit a request for $1.4 billion to help implement the October 1998 Wye River accord between Israel and Palestinian leaders.

The requests are the latest sign of how difficult it is for both parties to live within the tight spending restrictions imposed as part of the 1997 budget deal. Indeed, spending pressures are so great that it is increasingly likely that the government will have to borrow heavily from Social Security to finance its operations next year, according to independent analysts.

Both parties have pledged not to touch Social Security funds and to save them in a "lockbox" to shore up the retirement program in coming years. But Robert Reischauer, a senior fellow at the Brookings Institution, and other analysts said that promise is not being kept.

"After a year of pledging fealty to preserving the Social Security surplus for debt reduction, when faced with reality, Congress and the president are showing little reluctance to pick the lock on the lockbox," Reischauer said.

Any administration request for additional emergency or supplemental spending could prove especially ticklish for the White House because Clinton has regularly ridiculed tax cut proposals from the GOP-controlled Congress as a threat to Social Security funds.

White House Chief of Staff John D. Podesta said yesterday that the administration has been fiscally responsible in preparing its budget plans, noting that the president had offered various proposals for financing spending that would otherwise bust the budget restrictions.

Virtually all of those offsets, such as a proliferation of user fees and an increase in the tobacco tax, were political non-starters, however. Lawmakers refused to accept any of Clinton's dozens of user fees and his tobacco proposal.

Congressional leaders also disavow any plans for spending the Social Security surplus. "Our folks are committed to moving forward with the lockbox in place and getting our work done," said Pete Jeffries, a spokesman for House Speaker J. Dennis Hastert (R-Ill.).

The coming showdown over the budget has its roots in Clinton's 1998 State of the Union demand that politicians "save Social Security first," which effectively stalled the GOP tax cut drive last year and left angry Republicans determined to one-up the president on Social Security this year.

The advent of small but growing non-Social Security surpluses -- estimated to be $14 billion in the coming year -- gave Republicans the opening they needed. They could pay for the first year's installment of a tax cut with non-Social Security surplus funds while promising to lock away Social Security money in a budgetary lockbox. Republicans even staged an event last spring in which a beaming House Budget Committee Chairman John R. Kasich (R-Ohio) put a dollar bill into a safe to symbolize the Republican promise to safeguard the money.

In May the House adopted a GOP provision forbidding Congress to spend money intended for the nation's retirees except in an emergency, a so-called lockbox budgetary approach that Clinton endorsed in concept even while Senate Democrats blocked a vote on it.

But by taking this stand, Clinton and the Republicans painted themselves into a corner. A costly war in Kosovo, pent-up demand for increased domestic spending, hurricanes and earthquakes, and Republican insistence on a major tax cut this year blew apart the fiscal restraints imposed by the 1997 budget deal and now are eating into the surplus.

Estimates for how deeply politicians will end up dipping into the Social Security surplus this year range from $14 billion to $35 billion, and will depend on budget and tax decisions to be made in the next two months by Congress and the White House. But as they have worked through the budget bills this year, lawmakers are already dipping into the projected surpluses. Before departing for the August recess, for instance, the Senate approved $7.4 billion of emergency farm aid, and the House approved $4.5 billion of emergency funds for the 2000 census.

Even assuming that Clinton vetoes the Republicans' $792 billion tax bill, as he has promised to do, "we still may have to dip into the Social Security surplus to pay for everything else on the table," said G. William Hoagland, Republican staff director for the Senate Budget Committee.

For decades, Congress has borrowed from the Social Security trust fund to finance other government programs or to meet unexpected emergencies, and budget experts say a continuation of that practice would not directly harm Social Security or reduce its assets. But it could prove politically embarrassing for both parties.

© 1999 The Washington Post Company

Back to the top


Navigation Bar
Navigation Bar
 
yellow pages