Budget: The Numbers Game

Congressional Republicans want to reach a budget deal with the Clinton administration in March or April -- which could be made more difficult by new CBO projections that show the deficit increasing to $127 billion this fiscal year, a key Senate GOP aide said today.

"Negotiations will have to take place early," G. William Hoagland, the Senate Budget Committee's Republican staff director, told reporters.

Hoagland said Republicans want the conference agreement on the budget resolution -- due to be passed by April 15 under federal law -- to encompass a broad budget agreement with the Clinton administration. That would allow Congress to pass reconciliation bills by the beginning of August. Hoagland said the House also wants an early agreement and that even though Senate Majority Leader Lott wants to meet the April 15 deadline, that date could slip if negotiators are close to a budget deal.

Hoagland warned, however, that CBO projections set to be released Tuesday will show the deficit growing from $106 billion in FY96 to $127 billion in FY97 and almost $200 billion in 2002 if current policies continue. He noted that, despite talk about the desire to balance the budget by 2002, "it's still not that easy."

Hoagland attributed the increase to slow economic growth, coupled with continuing increases in Medicare and Medicaid spending. He warned the deficit increases will likely mean non- defense discretionary spending will have to freeze over the next five years -- a development made more difficult by the need to renew the Intermodal Surface Transportation Efficiency Act this year. Hoagland said that as part of ISTEA reauthorization, many senators want increased transportation funding, meaning other non-defense discretionary spending would have to be reduced.

He added while the House may again pass legislation to take the transportation trust funds off budget, it is a "difficult proposal to get through" the Senate.

Hoagland said that, unlike past years, when the president's budget has been declared dead when it reaches Capitol Hill, Republicans this time intend to use the Clinton Administration's FY98 budget plan as the starting point for talks. Hoagland said private budget talks already are starting, and talks will begin in earnest when the CBO releases its economic update Tuesday.

He added that budget talks are likely to have an impact on whether President Clinton uses his new line item veto authority early. Hoagland said if there are "good faith" talks going on, it would "not be wise" for Clinton to use the new authority.

Separately, OMB spokesman Lawrence Haas said the administration was hamstrung in writing its budget because the CBO did not make its baseline data available to the administration in advance.

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