THE PRICE of the tax cut congressional Republicans want to pass was made clear in a House appropriations subcommittee this week. To stay within spending limits that the financing of the tax cut would require, the subcommittee resorted to fanciful accounting whose effect would be to return the government to a policy of borrow-and-spend. When that failed to produce sufficient savings, the panel put the clamps on one of the leading federal programs for the poor as well.
Senators may not say so, but that's what the Senate will be voting for if it passes the tax bill, as expected, this week. Tax cuts that disproportionately benefit the better-off will be paid for by gimmickry, indiscipline and spending cuts in programs, many of which mainly benefit the poor.
The House subcommittee was marking up the appropriations bill for the departments of veterans affairs and housing and urban development, plus various independent agencies. It is the second-largest domestic appropriations bill. Like all of them, it is subject to tight caps that, over time and in the aggregate, would reduce spending on the covered programs by more than 20 percent in real terms. That's how most of the supposed surplus that would be used to finance the tax cut would be generated.
But Congress, even while passing a tax cut, is balking, with cause, at even the first stage of some of these spending cuts. To live within its allocation, the subcommittee designated $3 billion in veterans' health expenditures as "emergency" spending. "Emergency" means the spending doesn't count against the caps, but the only emergency in this case was political. Veterans' groups are unhappy about the cuts in their programs that the caps imply.
No matter that the veterans' health care system is overbuilt and needs to be rationalized. Vice President Gore was about to announce a $1 billion increase in the administration's veterans' budget. The House Republicans didn't want to be upstaged but didn't want to jeopardize the tax cut either. Surely that qualifies as an emergency.
To achieve the balance of the necessary "savings," the subcommittee turned to housing. The administration seeks a modest increase in the number of subsidized housing units for the poor, whose incomes continue to lag behind housing costs. The panel denied it and made some other cuts in administration requests. The House leadership is said to be eyeing the use of reserve welfare funds as an indirect means of financing the tax cut as well. That, too, is in effect what the Senate is being asked to vote for. It should vote no.