House and Senate negotiators yesterday agreed to delay a big chunk of the research budget of the National Institutes of Health, as they struggled to find new ways to hold down costs and stay within tight spending limits.
With concerns rising over their plan to cut programs across the board, Republicans leaders are once again turning to creative accounting tactics to make sure their spending bills are lean enough to avoid tapping into Social Security payroll taxes.
The last of the 13 spending bills to be considered by Congress, a giant $313 billion measure funding labor, health and human service programs, would provide the NIH with $17.9 billion for fiscal 2000, a 15 percent increase that exceeds the administration request by $2 billion.
But the bill, which will be considered by the full Congress today, would require the NIH to wait until the final days of the fiscal year in September to use $7.5 billion of that money. The tactic is aimed at limiting the actual amount of money that the government will spend at NIH in the current fiscal year; the plan would essentially roll over $2 billion of spending to next year.
The Clinton administration warned that the move would seriously hamper research efforts and impose significant administrative burdens on NIH, and congressional Democrats complained that it was yet another step eroding GOP credibility on budget matters.
But Senate Appropriations Committee Chairman Ted Stevens (R-Alaska) said Congress was justified in its use of accounting "devices" to cope with emergencies and pressing budget priorities that exceeded what Congress had previously set aside to spend this year.
The various devices are crucial to the GOP's campaign to pass all 13 spending bills for the fiscal year that began Oct. 1 without appearing to dip into surplus revenue generated by Social Security taxes. GOP leaders last night put the finishing touches on an unwieldy package that includes both the labor-health-education bill, the District of Columbia spending bill and proposal for a roughly 1 percent across-the-board spending cut.
Democrats maintain the "mindless" across-the-board cuts would "devastate" some agencies, hurt programs for mothers and children, and trigger large layoffs in the armed services. But House Majority Whip Tom DeLay (R-Tex.) said accusations the cuts would hurt defense were "nothing but hogwash." He said the criticism was coming from "the same officials who have sat by idly as the president has hollowed out the armed forces."
President Clinton has vowed to veto the huge package, as he has three other bills, and there is no way the two sides can reach agreement before a midnight Friday deadline. With neither side willing to provoke a government shutdown, the administration and Congress will agree on a third, short-term continuing resolution to keep all the agencies afloat while they continue negotiations.
While the Republicans and the White House are relatively close in negotiating overall spending levels, there are serious differences over how to spend money to reduce class sizes, hire additional police officers and meet a financial obligation to the United Nations, as well as disputes over environmental provisions in the bills.
Meanwhile, figures out yesterday showed that the federal government ran a surplus of $122.7 billion in fiscal 1999 (which ended Sept. 30), the first time the government has recorded back-to-back surpluses since the Eisenhower administration in 1956-57.
The 1999 surplus was almost double the 1998 surplus of $69.2 billion, which was the first since 1969. While the 1999 surplus was the largest in the nation's history in strict dollar terms, it was the biggest since 1951 when measured as a percentage of the economy, a gauge that tends to factor out the effects of inflation.
All of the surplus came from the excess payroll taxes being collected to provide for Social Security benefits in the next century. Contrary to an earlier estimate by the Congressional Budget Office, the non-Social Security side of the federal government ran a deficit of $1 billion, money that was made up from the Social Security surplus.
The drafting of the labor-health-education spending measure dominated the action behind the scenes on Capitol Hill yesterday. The House has been unable to pass its own version, so House and Senate negotiators worked out a final compromise in conference.
The $313 billion compromise exceeds last year's spending by $11.3 billion and includes more money for education, Pell Grants for college students, NIH, federal impact aid for local communities, the Ryan White AIDS program and community services block grants than the administration had requested.
While the bill provides $1.2 billion for class size reduction, the Republicans insist local school districts be given the option for using the money for other purposes while the White House would mandate the money for hiring additional teachers.
Republicans also were claiming $877 million in savings by using a computer database of newly hired workers to track down people who defaulted on student loans. The nonpartisan CBO said the idea would only save $130 million, but Republicans are using a more generous estimate used by Clinton's White House budget office.
Staff writers Juliet Eilperin and George Hager contributed to this report.