Budget on Front Burner

THE DAILY FED

Budget on Front Burner

The budget season officially opens this week, as President Clinton throws out the first pitch Thursday when he sends his fiscal 1998 spending blueprint to Capitol Hill. And House-Senate action on the balanced budget constitutional amendment also is slated to intensify this week.

Republican congressional leaders are promising that unlike past years, when the president's budget was declared "dead on arrival", they plan to use Clinton's proposal as the starting point for budget negotiations. But in a sure sign they do not trust themselves or the president to actually enforce a balanced budget, GOP leaders are ready to debate a hammer: the constitutional amendment that would require a balanced budget.

That proposal is expected to go to the Senate floor for debate Tuesday or Wednesday, following its approval by the Senate Judiciary Committee last week. In the House, the Judiciary and Budget committees are set to hold hearings on the constitutional amendment this week, and Judiciary is expected to mark it up Wednesday.

Even before Clinton unveils his budget Thursday, he will provide a preview Tuesday night when he delivers his State of the Union address before a joint session of Congress. White House Press Secretary Michael McCurry late last week said the top three priorities of unfinished business that Clinton will mention in his speech are balancing the budget, "making welfare reform a success" and campaign finance reform, while education will be his top priority for the future. McCurry said Clinton's speech will be "the concrete roadmap" of how to achieve the lofty goals Clinton laid out in his Jan. 20 inaugural address.

Once the Clinton budget is sent up, congressional leaders plan to begin a close examination of it almost immediately. OMB Director Raines is set to testify before the Senate Budget Committee Friday and the House Budget Committee next week.

Republican leaders for weeks have said they are worried Clinton will use gimmicks to help show he can balance the budget.

For his part, House Budget Chairman Kasich last week told CBO Director O'Neill she should analyze the budget without taking into account any trigger mechanisms that might cause spending reductions or tax cut cancellations if the budget is not balanced.

"CBO's estimates should reflect the explicit policies in the president's budget, rather than timing or budget process mechanisms that allow the administration to claim credit for presenting a balanced budget without having to make the programmatic tradeoffs necessary to achieve that end," Kasich said in a letter to O'Neill.

On the balanced budget constitutional amendment, Republican leaders have said they expect the Senate to vote first, most likely later this month.

Proponents and opponents in the Senate are predicting a close vote. Two crucial Democrats, Sens. Joseph Biden of Delaware and Robert Torricelli of New Jersey, have said changes may have to be made in the BBA if supporters want their votes.

House GOP leaders want to vote on the constitutional amendment Feb. 26, and the House vote could be even closer than the Senate vote.

During the 104th Congress, the BBA cleared the House but failed in the Senate by one vote.

With the increased GOP majority in the Senate for the 105th Congress, even Senate Minority Leader Daschle last week acknowledged Senate supporters of the BBA have a better chance to succeed in that chamber this year. But Kasich recently said supporters of the amendment lost 20 sure votes in the House when members left Congress at the end of the 104th Congress.

Freshman Democrats are considered a crucial group by both supporters and opponents.

However, sophomore Republicans may be a wild card, since a group of them last week said they might support a Democratic plan to exempt Social Security from balanced budget calculations if their leaders do not agree to deal with the issue in separate legislation.