Dems Reject Budget Offer

As Democrats review the latest Republican budget offer, they most likely will continue to object to the tax cuts and discretionary spending levels contained in the plan, a source told CongressDaily yesterday.

While the Democrats have not completed their review, the plan clearly does not contain a level of non-defense discretionary spending the White House will find acceptable, the source said.

The new plan calls for discretionary spending levels that would be $188 billion below an inflationary increase over the next five years. It provides no recommendations of how those spending levels would be reached.

The Clinton administration has said it needs spending increases in key priority areas, including education and the environment. On taxes, the proposal includes a $150 billion tax cut coupled with about $50 billion in tax increases that would be funded through such provisions as the airline ticket tax.

The proposal also does not reach balance, with a $50 billion hole that could be plugged with an adjustment in the Consumer Price Index.

GOP leaders have said the Clinton administration must make the first move toward the controversial CPI adjustment, since it would cut cost-of-living increases in such programs as Social Security.

However, some Republicans will not go along with a CPI adjustment. On CNN's "Inside Politics Weekend," Sen. Phil Gramm, R-Texas, reiterated he and other conservatives would oppose a CPI adjustment.

"The reason that politicizing the [CPI] is so appealing is that the president wants to spend $120 billion more on discretionary spending," said Gramm, a member of the Budget Committee. He later said, "It doesn't take any political courage to cut Social Security and to raise taxes under the table."

Meanwhile, the source said it is unclear what happens next in terms of the budget negotiations, with no official meetings scheduled for yesterday.

Negotiators are again pressing to wrap up an agreement this week, since President Clinton travels to Mexico next week.

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