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Analysis Finds Clinton’s Budget Plan Optimistic : Politics: Nonpartisan congressional analysis sees deficit remaining near $200 billion through 2005. White House remains confident with projections.

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TIMES STAFF WRITER

Challenging the credibility of President Clinton’s balanced-budget initiative, congressional Republicans and nonpartisan budget analysts declared Friday that his new proposal to eliminate the deficit in 10 years would fall far short of that goal.

“It doesn’t do the job he claimed it would,” said Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) after reviewing Clinton’s latest budget recommendations. “I don’t believe it comes close to balancing in 10 years.”

The Congressional Budget Office, the nonpartisan research arm of Congress, backed up that claim, releasing a preliminary analysis that concluded: “The projected deficits under the President’s June budget would likely remain near $200 billion through 2005.”

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Administration officials, however, stood by their plan and accused Republicans of trying to relegate the President to the sidelines of congressional budget debate.

“Some elements of the Republican Party have an interest in portraying the President as irrelevant,” one Administration official said.

The dispute could put Clinton in a political bind. By offering his 10-year budget-balancing plan, he has taken the huge risk of alienating fellow Democrats who wanted to stick to the strategy of criticizing GOP budget cuts without offering an alternative. And if his plan is seen to fall short, Clinton may not even reap the credit he seeks for proposing a balanced budget.

Criticism of Clinton’s budget-balancing plans came as a joint House-Senate committee worked to resolve differences between the GOP budgets passed by each chamber. Both versions claim that they would eliminate the deficit by 2002 but they feature vastly different proposals for tax cuts.

The House budget calls for about $350 billion in tax cuts over seven years, while the Senate recommends cuts of about half that amount, and it would allow them only after Congress enacts a budget-balancing plan.

Clinton released his budget proposal Tuesday after months of criticizing GOP proposals to curb domestic spending. The President embraced the GOP goal of a balanced budget and called for curbing the growth of Medicare and other social programs. He said that his plan would balance the budget by 2005.

The Congressional Budget Office challenged that conclusion Friday in its analysis, which was requested by Republicans skeptical of the Administration’s claim. June E. O'Neill, director of the agency, said in a letter reporting her findings to the House and Senate Budget committees that the Administration’s deficit projections were far lower because it used more optimistic assumptions about economic growth and spending on health care than did the CBO.

Although the economic assumptions of the agency and the Administration varied only slightly, O'Neill wrote, “the differences are sufficient to produce noticeable differences in budget projections.”

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The Administration insisted that its projections were not unrealistically optimistic.

“We feel very confident that were the policies in the President’s 10-year plan enacted in full, we would reach at least balance in the year 2005,” said Lawrence Haas, spokesman for the Office of Management and Budget. “Our estimates for the economy and health care spending are well within the mainstream of economists’ thinking.”

Even before the Budget Office analysis was complete, House Budget Committee Chairman John R. Kasich (R-Ohio) said that the Administration would have to “go back and look at additional savings” if it wants to achieve a balanced budget. But Administration officials indicated that they are not likely to seek further cuts.

“At this point we’re not moving,” Haas said.

Meanwhile, negotiators continued their search for compromise on a bill that would provide $6.7 billion in disaster assistance to California and other states.


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