GOP Budget Plans Portray Drastic Federal Downsizing

After months of saying that they wanted to transform the nature of government, Republicans in Congress have drawn up budget plans that present a bold portrait of what they have in mind--and the result looks very different from the government of today.

The House Budget Committee Wednesday night approved a GOP budget that calls for eliminating 368 federal agencies, commissions and programs, transferring dozens of responsibilities to the states and imposing unprecedented limits on Medicare spending.

The 24-17 vote, with only Mississippi Democrat Mike Parker breaking party ranks to vote with the GOP, sends the measure to the full House.

The House spending plan, like the one released by Senate Republicans on Tuesday, would accomplish the Herculean task of bringing the federal government’s books into balance by the year 2002 for the first time in a quarter-century. In fact, House Republicans did their Senate counterparts one better with a plan that would achieve that goal while providing a huge tax cut.

The two budgets represent more than just a blueprint for the tax and spending bills that other congressional committees will draft later this year. They also provide a road map to the GOP vision of the future--a government that is substantially smaller and more limited in its aspirations and its involvement in American life.

It is a federal government that would tell the poor to look to the states or to private charity for more of the help they need. It would have little role in the arts, humanities, education and housing. It would pull back from many of its international commitments and spend far less in foreign aid. It would be stripped of many longstanding programs that are emblems of other eras, such as the New Deal’s Tennessee Valley Authority, the Great Society’s VISTA volunteer program and the Cold War’s Voice of America, which beamed radio programs behind the Iron Curtain.

The House Republicans’ budget is “a rational, innovative, bold restructuring of the way this government operates,” said House Budget Committee Chairman John R. Kasich (R-Ohio). To dramatize the problem the GOP is trying to attack, Kasich on Wednesday hung a flashing “National Debt Clock” in the front of his committee room that ticked off the increases in the national debt as the panel debated his budget proposal.

Clinton Administration officials denounced the budgets in the harshest terms, continuing to train their fiercest fire on proposals to rein in the growth of spending for Medicaid and Medicare.

“This is a recipe for very serious injury to the most vulnerable populations we have,” said Alice Rivlin, director of the White House Office of Management and Budget.

Rep. Martin Olav Sabo (D-Minn.) said the House GOP budget “escalates rather than helps solve” what he said is a growing discrepancy between rich and poor in America.

But Budget Committee Democrats have been largely powerless to break GOP party unity and win approval of significant changes in the GOP spending plans. No major amendments were approved by the Senate Budget Committee in Wednesday’s debate about the plan of Chairman Pete V. Domenici (R-N.M.). The plan is expected to be approved by the panel by week’s end.

The House panel rejected all major Democratic amendments, including one to take out a House-passed tax cut.

The two panels’ budgets, which must still win approval in the full House and Senate and then be melded into a compromise acceptable to both bodies, do not require President Clinton’s signature.

Both Kasich’s plan and the budget being debated in the Senate committee call for spending about $1.6 trillion in the coming fiscal year and make no major changes in defense or Social Security. However, both assume that there will be adjustments in the consumer price index, beginning in 1999, that would scale back cost-of-living increases for Social Security and other federal benefits that are indexed to inflation.

The House budget makes room for the tax cut--$350 billion over seven years--that the House approved earlier this year. The Senate budget makes no such allowance and therefore makes somewhat smaller spending cuts.

The House budget calls for saving $280 billion over seven years by reducing the rate of growth of Medicare, compared to the $256 billion in savings called for in the Senate budget.

While the Senate budget spells out no specific instructions about how those savings might be achieved, Kasich’s budget suggests several options. Two of them would impose caps for the first time on the amount spent every year on Medicare, which now costs whatever is necessary to pay for the health care of the elderly.

One option outlined by Kasich would provide the elderly an annual allowance with which to buy private health insurance. Another would encourage recipients to enroll in managed-care programs.

While Republicans say that these changes are designed to keep Medicare from going bankrupt by the turn of the century, Democrats contend that the GOP has a different agenda.

“No matter what gimmicks they use. . . , the fact is these Medicare cuts are being used to fund the crown jewel of the (House GOP) ‘contract (with America),’ which is their huge tax cut for the wealthy,” said White House Chief of Staff Leon E. Panetta.

The House also took a more Draconian approach than the Senate in how it would reshape the federal bureaucracy. The Senate plan would abolish about 100 federal agencies and programs, and one Cabinet department--Commerce--would be abolished. The House would erase more than three times as many programs, including three Cabinet Departments--Education, Energy and Commerce.

Times staff writer Paul Richter contributed to this story.

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Proposing A Budget

A comparison of the Republican-sponsored budgets advancing through the House and Senate.

BUDGET SIZE

HOUSE: Balances the budget for the year 2002 at about $1.8 trillion in both revenue and spending.

SENATE: Balances the 2002 budget at nearly $1.9 trillion.

TAXES

HOUSE: Makes room for a $350 billion tax cut over the next seven years.

SENATE: Makes no room for an immediate tax cut but would eventually allow declining federal interest costs to finance a tax cut.

SOCIAL SECURITY

HOUSE: Reduces future cost-of-living adjustments to 0.6 percentage points less than the increase in the consumer price index as of 1999.

SENATE: Reduces future cost-of-living adjustments to 0.2 percentage points less than the CPI increase.

MEDICARE

HOUSE: Reduces expected spending growth by $280 billion over the next seven years.

SENATE: Reduces spending growth by $256 billion over the same period.

MEDICAID

HOUSE: Converts the program to a block grant and eventually cuts annual spending, 8.5% this year, to 4%.

SENATE: Cuts annual spending increases to 4%.

BUREAUCRACY

HOUSE: Eliminates the Commerce, Energy and Education departments.

SENATE: Eliminates the Commerce Department.