House Approves Landmark Balanced-Budget Legislation : Government: The GOP-backed bill, OKd in 227-203 vote, would curb the reach of federal power, cut taxes and scale back social programs. Senate is to act on similar plan.

Reaching a major milestone in the Republican effort to roll back the power and reach of government, the House on Thursday approved landmark legislation intended to balance the budget by 2002, reduce taxes and make the biggest changes in federal social policy in a generation.

The bill was approved, 227 to 203, a vote largely along party lines that will draw a distinct line between the parties as they head into the 1996 presidential campaign. Only 10 Republicans voted against the bill and four Democrats voted for it.

The gargantuan measure is a monument to the breadth of Republican ambitions since the party took control of Congress in January. The two-volume, 1,754-page bill is a field guide to GOP dreams about how to reshape, scale back and redirect scores of federal programs, including Medicare, Medicaid and other programs that have been cornerstones of social policy since the War on Poverty was declared in the mid-1960s.

The bill, like the companion measure before the Senate, would end Americans’ entitlement to federal assistance when they fall into poverty, while transferring enormous power to states to weave the social safety net as they see fit. It would make deep cuts in farm subsidies that have been politically sacrosanct since the Great Depression. It calls for eliminating a Cabinet agency--the Commerce Department--for the first time in the history of the federal bureaucracy. It would give businesses and individuals $245 billion in tax cuts over the next seven years.

Republicans hailed House approval of the bill, which President Clinton has threatened to veto, as a turning point in an uphill struggle to reverse a decades-long trend toward bigger deficits and expanding government power.

“It was the most decisive vote on the direction of government since 1933,” said House Speaker Newt Gingrich (R-Ga.) after the vote.

“The great social experiment of the last 30 years has led to an unprecedented expansion of the federal government and yet, sadly, it has failed to solve our nation’s most difficult problems,” said Ways and Means Chairman Bill Archer (R-Tex.). “The time has come to admit that tax and spend has failed.”

Democrats, resigned to defeat from the outset, relentlessly accused Republicans of trying to destroy Medicare and give tax cuts to people who do not need them. Democrats seemed to agree with Republicans on only one thing: that the debate was about far more than balancing the budget.

“It is about two very different visions for America’s future,” said Martin Olav Sabo (D-Minn.). “I call upon my colleagues to reject a vision of America that seeks to reward those who have already prospered in our economy while imposing burdens on those who have not.”

It was a particularly poignant moment for senior Democrats who had spent their careers in Congress building the social programs that they found themselves unable to preserve.

“This is one of the worst pieces of legislation I’ve seen in my 40 years in Congress,” said Rep. John D. Dingell (D-Mich.), the dean of the House.

Still, the House’s two-day debate on the bill was remarkably lacking in drama or suspense. That was a tribute, in part, to the remarkable party unity that the GOP has displayed all year under Gingrich. But it also reflected a pervasive sense that significant changes will be wrought before the measure becomes law because of Clinton’s veto threat.

Contentious Remark

The war of words between the White House and Republicans turned especially bitter Thursday, when Clinton’s Press Secretary Mike McCurry joined Democrats in contending that GOP leaders want Medicare to die. “You know, that’s probably what they’d like to see happen to seniors, too, if you think about it,” McCurry said in a sardonic manner.

Gingrich and Senate Majority Leader Bob Dole (R-Kan.), in a joint statement, called the comment “reprehensible, divisive, un-American,” and urged Clinton to fire McCurry.

Even if eventual negotiations between Congress and the White House produce changes in the bill, what remains will still likely mark a sea change in federal fiscal policy because Clinton, for all his veto threats, has signaled a willingness to accept key elements of the Republican plan. He has endorsed the goal of balancing the budget and even indicated that he could accept the GOP’s seven-year timeline. He has accepted the idea of ending poor Americans’ entitlement to welfare. He has called for cuts in taxes and in the growth of Medicare, although he disagrees with Republicans about the size and focus of those reductions.

Negotiations with Clinton are not likely to begin in earnest until after House and Senate Republicans iron out the differences between their versions of the bill. In many areas, such as farm policy and welfare, the Senate’s bill proposes less drastic changes in current policy than does the one in the House. The Senate is expected to vote on its bill today.

During its second day of debate Thursday, the Senate rejected a series of Democratic amendments seeking to ease cuts in social programs--including one, rejected on a 53-46 vote, that would have scaled back proposed cuts in Medicare growth to $89 billion.

The so-called “reconciliation bills” before the House and Senate are the centerpiece of Republicans’ effort to balance the budget, which until now has been waged piecemeal through the 13 annual appropriations bills. However, spending cuts in those measures do not affect federal entitlements, such as Medicare and welfare, which automatically provide benefits for anyone who qualifies. Entitlement spending can be controlled only through changes in the programs’ structure and that is at the heart of the House reconciliation bill.

Medicare Growth Cuts

The bill incorporates several measures already approved by the House, including legislation to cut $270 billion from the growth of Medicare, which was approved by the House last week, and welfare reform plans approved earlier this year.

The solid Republican support for the bill represented a bold rejection of conventional wisdom about budget politics. For years, Congress shied away from making spending cuts needed to eliminate the deficit, in part because politicians assumed that voters cared less about eliminating the deficit than they did about the benefits of federal programs. Republicans now are gambling that they would pay a bigger political price for not living up to their promise to deliver a balanced budget than they would for cutting popular programs.

Although the outcome of the House vote on the budget bill was never really in doubt, GOP leaders were making changes and quiet promises to wavering members until the eleventh hour. Some of those last-minute deals were buried in a procedural resolution that brought the budget bill to the floor.

Among those amendments was an additional $12 billion in funding for Medicaid, most of which would be used to increase allotments to several states--including California--that thought they would be shortchanged by the proposed funding formulas. The amendment also included $3 billion for states with large populations of illegal immigrants. About half of that money would go to California, according to a spokesman for the amendment’s author, Commerce Committee Chairman Thomas J. Bliley Jr. (R-Va.).

In other last-minute changes, GOP leaders dropped proposed new parking fees for federal employees, as well as a proposal calling for a review of the National Park System. They also slipped in a proposal to allow U.S. drug companies to manufacture for export drugs that are not approved by the Food and Drug Administration--an amendment sought by Rep. Fred Upton (R-Mich.), whose district is home to a large pharmaceutical manufacturer.

Those concessions, however, were mere grace notes in a symphony of major changes that would be made in federal policy by this omnibus bill. The bill’s tax provisions are a remarkable monument to how much the terms of fiscal debate have changed since Republicans took control of Congress. In this bill, unlike past deficit-reduction efforts, Republicans not only refused to consider tax-rate increases, they insisted on tax cuts for businesses and individuals.

However, the bill also would increase the tax burden on many working class families because it would scale back the earned-income tax credit, which goes to families earning up to about $27,000 to help keep them from falling into poverty.

Almost eclipsed by those proposals are scores of other provisions that, at another time, would be considered major policy changes. The bill would eliminate an entire student loan program, establish new tax breaks to encourage savings for medical expenses, overhaul and reduce federal housing subsidies, require federal employees to contribute more toward their retirement funds, consolidate several foreign policy agencies, including the Agency for International Development, and open Alaska’s Arctic National Wildlife Refuge to oil and gas drilling.

Clinton has said that the oil-drilling provision alone would be enough for him to veto the bill.

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Vote on House GOP Budget

WASHINGTON--Here is how members of the California delegation voted in the 227-203 roll call Thursday by which the House approved the Republican budget plan:

Republicans for--Baker, Bilbray, Bono, Calvert, Cox, Cunningham, Doolittle, Dornan, Dreier, Gallegly, Herger, Horn, Hunter, Kim, Lewis, McKeon, Moorhead, Packard, Pombo, Radanovich, Riggs, Rohrabacher, Royce, Seastrand, Thomas

Democrats for--none

Republicans against--none

Democrats against--Becerra, Beilenson, Berman, Brown, Condit, Dellums, Dixon, Dooley, Eshoo, Farr, Fazio, Filner, Harman, Lantos, Lofgren, Martinez, Matsui, Miller, Pelosi, Roybal-Allard, Stark, Torres, Waters, Waxman, Woolsey

Democrats not voting--Tucker

Poll Watch

Controversial Question?

A New York Times/CBS News poll released the following:

If you had to choose, would you prefer balancing the federal budget or preventing Medicare from being significantly cut?

Preventing Medicare from being cut: 67%

Balancing the budget: 27%

Don’t know: 6%

Analysis: The response would seem to indicate strong opposition to Republican budget-balancing plans, but GOP leaders charged that the wording of the question unfairly skewed the outcome. The controversy illustrates one of the trickiest aspects of polling: Very small changes in how a question is worded can lead to significantly different results. The controversy here involves the words “significantly cut.” Republicans deny their Medicare plan is a “cut”-pointing our spending would actually increase each year. Democrats say it is a cut because spending would not keep pace with the number of elderly Americans and the inflation of health care costs.

Source: New York Times/CBS News Poll; 10/22-24