Surplus surges; could ease budget work
Going into a budget meeting Thursday afternoon, GOP leaders received some good news from CBO Director Dan Crippen, as he told the House Budget Committee today that federal revenues continue to increase.
House and Senate leaders want to agree on an fiscal 2000 budget outline, but are struggling with how to maintain fiscal discipline while also spending more on defense and education, and balancing tax cuts with protecting Social Security.
Crippen told Budget Committee Chairman John Kasich, R-Ohio, that revenues are "certainly above" expectations, with the inflation rate lower than expected. Asked by Kasich whether such trends mean the CBO will have to increase its estimate of the fiscal 1999 budget surplus-now pegged at $111 billion, including Social Security-Crippen said, "Yes, I think we will have a bigger surplus" than expected, although he subsequently told Budget ranking member John Spratt, D-S.C., he does not think the CBO will be "too far off in the projections."
If the surplus grows, more money may become available before the budget process is over that could be used to cut taxes more, increase discretionary spending, or allow Republicans to match President Clinton's pledge to set aside funds to shore up Medicare.
But House Minority Leader Dick Gephardt, D-Mo., speaking to reporters Thursday, insisted that 77 percent of the budget surplus must be set aside to guarantee the solvency of both Social Security and Medicare, calling the issue a "very key part of the whole year."
Of the GOP plan, Gephardt said, "My concern is that, from what I've heard, it doesn't include Medicare-it just includes Social Security." While saying Democrats would look at the GOP proposal once it is completed, "it should include Medicare, and if it doesn't, it's an insufficient proposal." Gephardt added that he is concerned that a proposal by Reps. Wally Herger, R-Calif., and David Minge, D-Minn., does not take all interest collected on Social Security taxes off budget.
Meanwhile, White House Press Secretary Joe Lockhart today questioned the efficacy of a plan broached by Senate Republicans to force Social Security taxes to be used only for paying down the debt unless 60 votes can be found to overcome a budget point of order to spend the money elsewhere.
"It doesn't have the 'lock box' provision that the president's proposal has, which actually transfers bonds into the Social Security trust fund," Lockhart said. The GOP proposal could more easily be overturned, he indicated. But Lockhart said the Republican plan indicates "there is general agreement on the president's agenda to save Social Security first," and he added, "We look forward to working with them on this issue."
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