House Republican leaders said yesterday they intend to impose a 1.4 percent across-the-board spending cut affecting virtually every federal agency, part of a final push to finance this year's federal budget without touching Social Security revenues.
If the Senate goes along with this approach, as expected next week, some lawmakers and government experts said it could have a far-reaching impact on the federal bureaucracy, forcing layoffs or a reduction in the work force, curtailing travel and postponing some planned initiatives.
An analysis by the Office of Management and Budget (OMB) issued late yesterday warned that the across-the-board cuts in defense alone would hurt readiness and recruitment programs and trigger the forced separation of as many as 39,000 military personnel.
Republicans said they are resorting to this tactic, designed to save an estimated $4.5 billion, because it was the only way left to avoid touching Social Security payroll taxes to meet their overall spending goals. They contend that a spending cut of less than 2 percentage points was the fairest approach and one that would work no real hardship on agencies. Most of the savings, they said, could come by eliminating waste, fraud and abuse.
"This is not some Herculean effort," said House Budget Committee Chairman John R. Kasich (R-Ohio), one of the architects of the plan. "It's about time the government got back to downsizing itself again."
Under the new approach, said House Majority Leader Richard K. Armey (R-Tex.), when Pentagon officials testify before Congress, "Instead of having two colonels hold your paper, you'll have only one major."
But the White House and congressional Democrats vowed to fight the plan, arguing that an across-the-board cut would indiscriminately cut both good programs and bad. OMB officials also dispute the Republicans' accounting, arguing that deeper cuts of at least 9 percent across the board would be needed if Congress and President Clinton are determined to stay out of Social Security.
"It's the worst of both worlds," said Linda Ricci, a spokesperson for the White House budget office. "On the one hand, it would indiscriminately cut important funding for education, the environment, law enforcement and many other areas of government. But even so, it doesn't achieve what the Republicans say their goal is: to refrain from spending the Social Security surplus."
For the third day, Democrats and Republicans exchanged barbs over which party was more committed to protecting Social Security, even as White House officials and congressional appropriators continued to meet privately to try to work out a final compromise on spending.
GOP leaders, including Armey and House Majority Whip Tom DeLay (R-Tex.), staged an outdoor rally near the Capitol to criticize the Democrats as big spenders who favor "raiding" Social Security to finance their programs. Clinton complained that Republicans were "trying to accuse us of doing what they have done on the Social Security surplus."
"But I am committed to turn the other cheek until we see if we can work it out together," Clinton said.
Meanwhile, the president signed into law a record $8.7 billion farm bailout Friday, the second rescue in two years for farmers hit by floods, drought and unrelentingly low prices. Clinton has signed seven of the 13 spending bills while vetoing two others that fund foreign aid and the District of Columbia government. Congress has completed work on all but two bills, a revised D.C. measure and a huge $317 billion labor, health and education spending bill.
At one time the Republicans and the White House pledged to hold annual spending within the tight spending caps dictated by the 1997 budget agreement, but they quietly abandoned that goal this fall in the face of the cost of natural disasters, war and demands for more spending.
Instead, the Republican-controlled Congress has set as its new goal the slightly less onerous task of passing the bills without dipping into Social Security. The dispute is largely a political one: Government has routinely financed its programs by dipping into surplus revenue generated by Social Security, and experts say it would have little impact on the solvency of the program.
Still, Republicans say that if they can hold spending on the bills to $592 billion, they will achieve their goal, although they would have to rely on a variety of creative accounting tactics and budget assumptions aimed at making the amount of spending seem smaller than it is.
Republicans said yesterday that they think they can overcome their final hurdle by postponing about $1.3 billion of health spending and by imposing the 1.4 percent across-the-board spending cut. That plan will be considered by the House and Senate early next week. While the Senate has not formally signed off, a spokesman for Senate Majority Leader Trent Lott (R-Miss.) said "we expect to go along with it."
The proposed new cuts would affect every agency, including the Defense Department, but would not touch mandatory spending programs, such as Medicare and Medicaid. Nor would it affect the pay raises that were approved this year for members of Congress and federal workers.
An aide to Rep. Steny H. Hoyer (D-Md.), a senior member of the House Appropriations Committee, warned that reductions of federal workers may be unavoidable as agency heads are forced to choose between providing services to taxpayers and cutting back on personnel.
"Every time they need money they look at federal employees," said Debra DeShong, the aide. "While salaries are mandatory, an across-the-board cut will have impact on hiring."