GOP Takes On History, Algebra In Budget Plan
SINCE 1978, when Jimmy Carter was president and some people still wore bell-bottoms, congressional promises to balance the budget have been a spring perennial in Washington.
So as Republicans in Congress pass new resolutions -- in the House last week and the Senate this week -- requiring a balanced budget by the year 2002, the question arises: Is this year any different? After all, lawmakers have been known to pledge their hearts to fiscal probity in May, yet fall for flashy deficit spending by November.
But 1996 may really be the year Congress sticks to the budget reduction straight and narrow. The reasons: While past plans were often vague, this time GOP plans are unusually specific. Also, the Republican majority is uncommonly united in its resolve to get the budget to zero.
A cursory look at the numbers in the House budget resolution underscores the sincerity of its authors: three federal departments, 13 agencies, 284 programs, and 60 commissions would meet the ax. The plan also sets spending levels for each of the next seven years. The Senate Republican budget-cutting plan is similarly specific.
But budget resolutions are not budgets, they are merely blueprints. A series of hurdles will test the GOP's unity and budget-cutting resolve in the months to come.
First, the two chambers will have to reconcile differences in their plans, including deep divisions over the House's $350 billion tax-cut package. Second, Congress will have to square with the White House over Medicare and Medicaid, the government health-care programs for the elderly and poor that would produce the bulk of the savings.
Finally, the budget committees, which draw the plans, will have to agree with the appropriations committees, which determine the specifics. And the cultural divide between the two committees is not insignificant. Budgeteers think in terms of numbers, appropriators in terms of programs. The gap is already apparent.
Rep. John Porter (R) of Illinois, chairman of the appropriations subcommittee for Labor, Health, Human Services, and Education won't give approval for the budget committee's blueprint without studying the impact on his subcommittee programs. ''I'm interested in getting an allocation we can live with and do well with,'' he says.
A history of failed attempts
The modern story of budget balancing is an unbroken chain of failed attempts, each well-intentioned, ''historic opportunity'' dashed by lost resolve, recession, or economic crisis.
After running deficits for nearly a decade, Congress in 1978 adopted legislation stipulating that in three years federal spending would no longer slip into the red. Then, in 1981, the year that promise was due to take effect, President Reagan produced a budget plan calling for a budget surplus in four years. But tax cuts and military increases proved the wrong recipe.
In 1985, with balance still elusive, Congress passed Gramm-Rudman-Hollings, a law aimed at balancing the budget over five years, setting deficit levels for each year and requiring automatic across-the-board cuts if those levels were exceeded. But that law faltered after two years when Congress, facing a higher deficit than anticipated, revised the annual spending limits.
Recession killed the Gramm-Rudman-Hollings law altogether in 1990. Congress and President Bush, faced with climbing deficits and the savings-and-loan crisis, produced a budget calling for $500 billion in tax increases and spending reductions. That plan and a similar agreement between Congress and President Clinton in 1993 were also supposed to achieve balance.
Although the Bush and Clinton plans did reduce the deficit, spending under those plans continued to grow.
Economists and political analysts note important differences this time. The Republican majority is uncommonly united, with a strong, ideological block of freshmen who believe they were elected last fall because of their promise to balance the budget and reduce the size of government.
The House plan, written by Budget Committee chairman John Kasich (R) of Ohio, furthermore, is historic; its range far exceeds previous plans.
But Republicans are headed for a tough battle among themselves and with Democrats over tax cuts. Senate Republicans see little wisdom in decreasing revenues -- the House package could cost $650 billion over 10 years, according to the Treasury Department -- before the budget is in balance.
Democrats on the offensive
Democrats paint the issue in terms of class. Last Thursday, Rep. Richard Gephardt (D) of Missouri, the Democratic leader, said Republicans were offering large tax breaks to the wealthy at the same time they were decreasing benefits to the elderly, such as Medicare. ''We're taking $1,300 from these folks so we can give a $20,000-a-year tax break to people earning $350,000 a year or more,'' he said, citing a Treasury Department study.
While House and Senate blueprints would reduce Medicare spending by 15 and 14 percent respectively, the House tax cuts would raise the level of nontaxable Social Security earnings from 50 to 85 percent of benefits.
Nonetheless, a Washington Post-ABC poll showed last week that 60 percent of the public opposed the House plan, and 56 opposed the somewhat milder Senate plan. That doesn't bode well for the long-term success of the GOP effort.