New GOP spending plan leaves little margin for error

Despite Republicans' general enthusiasm for the budget scenario House Speaker Dennis Hastert, R-Ill. and Senate Majority Leader Trent Lott, R-Miss., presented to President Clinton Tuesday-to devote 90 percent of next year's surplus to debt reduction and the remaining 10 percent to spending and tax cuts-a breakdown of the numbers shows GOP leaders are not giving themselves much margin for error.

The Congressional Budget Office's July economic update projects a total budget surplus of $268 billion for fiscal 2001; under this latest GOP budget plan, $241 billion would go to buying down the publicly held debt, and $27 billion would be left to cover increased discretionary spending in the fiscal 2001 appropriations bills, as well any enacted tax cuts and other priorities-such as restoring some of the 1997 Balanced Budget Act (BBA) cuts to Medicare providers.

Of that $27 billion, GOP leadership aides in both the House and Senate said they envision devoting roughly $13 billion to appropriations and so-called "BBA givebacks," and the other $14 billion to tax cuts. As it stands, the $13 billion available for increasing fiscal 2001 outlays represents the difference between the $625 billion in total outlays permitted by the GOP budget resolution and the CBO's inflation-adjusted spending baseline of $638 billion.

However, it also will have to finance whatever emergency spending Congress and the White House agree is needed for drought relief to farmers and fighting the Western wildfires.

Senate Banking Chairman Phil Gramm, R-Texas, a leading budget hawk, acknowledged that GOP leaders' budget proposal implicitly assumes the GOP-controlled Congress cannot keep next year's spending from exceeding the budget resolution figure that Gramm and House Budget Chairman John Kasich, R-Ohio, pushed so hard to cap at $600 billion.

"Yes, I think it cedes that much [additional spending] to Clinton before we begin," Gramm said, but added, "If I thought we could get out of here for only $13 billion, I'd be a happy man."

Meanwhile, the Senate VA-HUD Appropriations Subcommittee today approved its fiscal 2001 spending bill that provides $80.1 billion in discretionary spending, National Journal News Service reported.

The bill assumes a cash infusion, which is being worked out by Senate Appropriations Committee Chairman Ted Stevens, R-Alaska, and ranking member Robert Byrd, D-W.Va.

VA-HUD Appropriations Subcommittee Chairman Christopher (Kit) Bond, R-Mo., said today that, when the VA-HUD bill reaches the floor, there will be an amendment to lift the spending caps in order to fully fund the legislation. Extra money also will be coming from the fiscal 2001 Transportation spending bill, which is likely to be packaged with the VA-HUD measure if it reaches the floor.

Although conservatives declared earlier this year they would not allow any spending above the budget resolution, Bond said there would be support within the GOP Conference to lift the caps and agree to an overall spending level with the president. Under current Senate budget rules, lifting the cap will require 60 votes.