Conservative Democrats Offer Optional Balanced-Budget Plan

From Times Wire Services

Conservative House Democrats announced a seven-year balanced-budget plan Friday containing no tax cuts and calling for smaller reductions in Medicare, Medicaid and other social programs than Republicans favor.

The package, or something similar to it, is likely to be advanced as the Democratic alternative when the House votes on the GOP's budget-balancing measure in two weeks, said a top Democratic House aide, speaking on condition of anonymity.

"We think deficit reduction and a balanced budget is the first priority," said California Rep. Gary A. Condit of Ceres, one of the 22 conservative Democrats in the group called The Coalition.

The Democratic proposal is certain to be defeated, but it would give some Democrats who oppose the Republican plan a balanced-budget measure they could vote for.

However, it will be opposed by House Minority Leader Richard A. Gephardt (D-Mo.) and many other Democrats who reject the GOP goal of a balanced budget by 2002 and the overly harsh cuts they say such a schedule would require.

The conservatives said they consulted with the Clinton Administration as they wrote their plan.

Their package would extract $166 billion in savings from Medicare, $104 billion less than the GOP plan; $100 billion from Medicaid, $82 billion less than the Republican plan; and $63 billion from welfare, about $50 billion less than the GOP proposal.

It omits the $245-billion Republican tax-cut package. It would raise $72 billion with tax increases and by limiting raises in Social Security benefits by changing the way inflation is calculated, a politically risky step Republicans are avoiding until the Administration endorses it.

"We have placed deficit reduction over ideology, we have placed spending cuts before tax cuts and we have presented a credible complete package without blue smoke and mirrors," said Rep. Bill Orton (D-Utah).

Coalition members said they did not oppose the idea of tax relief but maintained that the budget should be balanced first and tax cuts should be paid for by closing tax loopholes elsewhere.

Clinton has vowed to veto the Republican budget and call Congress into special session to forge a compromise if needed. Clinton opposes the Republican tax cut, saying it is too big and would benefit the wealthy, but he has proposed a smaller cut that he says would be targeted at the middle class.

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