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GOP Has No Luck on a Budget Breakthrough

The Budget

From The Post
  • GOP Considers 13-Month Fiscal Year (Sept. 14)

    On Our Site
    Transcripts:

  • GOP Reps. Ehrlich, Watts, McIntosh, Portman and Thune on the Republican tax plan.

  • Democratic Reps. Frost and Cardin discussed the Democratic side.

  • White House spokesman Barry Toiv discussed the White House position.


  • By Eric Pianin and Juliet Eilperin
    Washington Post Staff Writers
    Wednesday, September 15, 1999; Page A4

    Congressional Republican leaders searched yesterday for a way out of a monumental bind that threatens passage of large spending bills, but virtually every proposal that was floated ran into stiff resistance.

    GOP leaders are struggling to keep spending within tight budget limits despite demands by the Clinton administration, lawmakers and special-interest groups for billions more. The leadership is studying dozens of options for saving money, but those floated at meetings throughout the day were immediately shot down or dismissed as budget gimmickry.

    House Republican leaders gave a cold shoulder to a Senate GOP plan that would defer spending on some labor, health and education programs to get around budget rules that would otherwise limit funding in those areas. And some Senate leaders and the administration spurned a House proposal to delay the payment of several billion dollars in tax credits to poor families to help offset spending for other domestic programs.

    "We have sort of bumped into a wall," conceded House Majority Leader Richard K. Armey (R-Tex.). "You get all these suggestions . . . and you test them out and see what has got legs."

    House Budget Committee Chairman John R. Kasich (R-Ohio) said he sent House GOP leaders a lengthy list of proposals several weeks ago but that no final decisions have been made. Those proposals include holding the administrative costs of Medicare and welfare to the rate of inflation and speeding up scheduled reductions in block grants to states for social services. Another GOP lawmaker said the House could save billions of dollars more merely by delaying Medicaid payments by a few days beyond the end of the coming fiscal year.

    Republicans previously considered a plan to reduce welfare block grant payments to the states in light of fast-shrinking welfare rolls, but the idea was dropped in the face of strong resistance from GOP governors.

    With less than three weeks until the new fiscal year begins Oct. 1, Congress has considerable work to do on the 13 annual spending bills for fiscal 2000. Although a considerable budget surplus is projected for next year, much of it will be generated by the Social Security program, and both parties have promised not to touch those funds.

    Democrats complained that the Republicans have little coherent strategy for funding the spending bills without dipping into Social Security. House Minority Leader Richard A. Gephardt (D-Mo.) compared the current congressional budget to a faulty blueprint for a house under construction.

    "It's not a stable foundation," Gephardt said in an interview. "You've got to tear down the house, tear up the blueprint, come up with a new one and build a new foundation."

    The Clinton administration, meanwhile, lashed out at the House GOP proposal to divert as much as $7 billion to cash-strapped spending programs by delaying earned-income tax credit (EITC) payments to the working poor, insisting such plans were unfair and unworkable.

    "Proposals to delay the EITC are tantamount to a tax increase on working families," said Treasury Secretary Lawrence H. Summers, adding that the GOP plan would transform an average lump-sum payment of $1,890 for a family with children into a monthly payment of $157.

    That, Summers said, could force recipients to delay purchase of big-ticket items such as used cars and appliances or to borrow against those future EITC payments at high interest rates.

    Senate Republicans also were unhappy with the plan. "I don't think we should try to ration things like the earned-income tax credit," said Senate Appropriations Committee Chairman Ted Stevens (R-Alaska). "That to me would be a gimmick, and I don't think it is fair."

    However, John Feehery, a spokesman for House Speaker J. Dennis Hastert (R-Ill.), insisted that the proposal "doesn't hurt anybody."

    "It's just spreading out the payments," Feehery said.

    Another proposal that came under sharp criticism from Republicans and Democrats alike was a Senate GOP plan to delay $12 billion to $16 billion in labor, health and education spending until the month after fiscal 2000 ends. The plan would allow Congress to circumvent budget caps that would otherwise prohibit such spending next fiscal year.

    "Let me just say it is controversial within the leadership structure in the House," Armey said. House Appropriations Committee Chairman C.W. Bill Young (R-Fla.) described the plan, known as "advance funding," as an "accounting gimmick."

    "If you know you have to spend the money, be up front, be honest," Young said.

    But Senate Republicans, including Budget Chairman Pete V. Domenici (R-N.M.), replied that there was nothing new about advance funding. In fact, there was $11.6 billion of such funds in this year's budget, and Clinton proposed $19 billion of such expenditures in fiscal 2000. Some Republicans also took exception to a Washington Post article yesterday that characterized the plan as effectively creating a 13th month in the coming fiscal year by postponing a large chunk of the spending.

    Democrats pounced on the story, with Rep. David R. Obey (D-Wis.) describing the plan for a 13th month as "Orwellian" and Sen. Kent Conrad (D-N.D.) charging that Republicans had "engaged in a fiction."

    Staff writer George Hager contributed to this report.

    © 1999 The Washington Post Company

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