Battle of the Budget

After months of posturing and maneuvering over wiping out the last vestiges of the federal deficit, and how to spend any surplus, the fiscal 1999 budget season officially begins today.

As allegations of impropriety continue to swirl around the White House and muddy the legislative outlook on Capitol Hill this year, President Clinton sends his budget plan to Congress, which immediately will begin dissecting the proposal. Republicans and Democrats on the House and Senate budget panels are expected to set off the first political skirmishes at a series of news conferences later today.

Senate Majority Leader Trent Lott, R-Miss., last week told the Conservative Political Action Conference he is committed to trying to balance the federal budget in fiscal 1998, as House Republican leaders sent a letter to Clinton asking him to "submit to Congress a package of spending reductions that would achieve a balanced budget in the current fiscal year without raising taxes."

The Congressional Budget Office has estimated that FY98 rescissions of $5 billion would balance the budget. "If we're that close, we should look at it to see if we can achieve it [balance] this year," Lott said.

The House letter--which was sent Friday and signed by Speaker Newt Gingrich, R-Ga., Majority Leader Dick Armey, R-Texas, Majority Whip Tom DeLay, R-Texas, and Republican Conference Chairman John Boehner, R-Ohio--also reminded Clinton "that this Congress intends to offset any new spending with equal reductions in current appropriations" and asks the administration's FY98 supplemental appropriations request be "accompanied by a list of specific spending cuts to avoid any possibility of new deficit spending."

In contrast to Clinton, who "is saying we have a new program a day and we want to spend more money," Lott told CPAC members "the Republican Congress gave you our word and we're going to keep it" by not allowing any new spending.

Lott also reiterated GOP goals for reducing the size of the federal government, mentioning in particular initiatives to reform the IRS, simplify and eventually sunset the current tax code, block grant federal education funds to the states and hold more oversight hearings of programs such as Medicare. Discussing the Senate's tax reform approach, Lott said the Senate plans to "get the IRS under control within the next three months," and praised a proposal by Sen. John Ashcroft, R-Mo., to reduce payroll taxes, which Lott said "liberals will resist at their peril." The question of IRS reform could become entwined in the debate on the Senate floor this week over renaming Washington National Airport after former President Reagan. Senate Democrats this week plan to offer a House-passed IRS proposal as an amendment to the Reagan bill.

Meanwhile, Sen. Lauch Faircloth, R-N.C., has sent Office of Management and Budget Director Franklin Raines a letter questioning how the president intends to use any budget surplus to save Social Security while still pushing new spending initiatives. "By my count, the president committed the nation to at least 50 new spending programs, costing potentially hundreds of billions of dollars," Faircloth wrote.

Faircloth attached a list of 51 spending initiatives he said the president has advocated. "If there were any hope of a federal surplus to save Social Security this year, it would seem likely to be siphoned off by the president's new spending programs," he wrote. "In fact, the president has seemingly committed the nation to spending that same surplus--many times over."

Administration officials have said Clinton's FY99 budget will reach balance next year, with all of the initiatives paid for.

The key congressional committees begin swinging into action Tuesday: The House Budget Committee will hear from Raines, while Treasury Secretary Robert Rubin appears before the Senate Budget Committee. On Wednesday, Raines goes before the Senate Budget Committee, and, on Thursday, CBO Director June O'Neill testifies before the House Budget Committee.

At the same time, House Appropriations subcommittees will begin holding hearings this week on the FY99 funding measures. Appropriators hope to move their 13 annual spending bills as quickly as possible after the budget resolution passes.