House Approves Republican Plan to Balance Budget

The House on Thursday passed a new Republican budget that lays the groundwork for an election-year battle with President Clinton over taxing and spending priorities.

The new GOP budget, approved on a 226-195 vote largely along party lines, calls for eliminating the federal budget deficit by 2002 and retains top Republican priorities such as a $500-per-child tax credit for families and abolition of the Commerce and Energy departments.

Even so, the differences between the White House and congressional Republicans have narrowed since last year’s budget struggle. The new budget, for instance, would cut taxes less than Republicans sought last year, and it backs away from some of their most controversial proposals to rein in the growth of federal spending.

Before approving the GOP fiscal plan, the House rejected Clinton’s own budget, 304 to 117. Later Thursday, as the Senate began debate on its version of the GOP budget, it also rejected the president’s plan by a vote of 53 to 45.

The House debate provided a window on Republicans’ tough election-year challenge: They want to reclaim the budget-balancing issue as their own. Republicans contend that Clinton’s plan to balance the budget is a sham that would postpone serious deficit-reduction measures until far into the future.

“His budget is kind of like a Hollywood set--a sturdy-looking facade backed by nothing more than a vivid imagination,” said House Majority Whip Tom DeLay (R-Texas).

Across the aisle, Democrats tried to debunk the impression that the Republicans have moderated their agenda, saying that the new budget still would provide too little for education, the environment and social programs.

“We find throughout this budget a variety of sugarcoating to look a little bit better than the radical agenda of 1995,” said Rep. Martin Olav Sabo (D-Minn.). “But when we look at its long-term impact, we find that in many cases it is as bad or worse.”

A study by the Center on Budget and Policy Priorities, a liberal-leaning research group, argues that the degree of “moderation” in the new GOP budget has been overstated in part because of changes in the way its savings have been calculated.

The Senate has begun debate on a companion budget-balancing measure, but a final vote is not expected before early next week.

The budget resolution is just the first step in the year’s fiscal journey. The resolution sets only targets for spending and revenues. Later, Congress will draft legislation that makes the spending and tax cuts mandated by the budget.

The exact size of the tax cut in the works is unclear. Both the House and Senate versions of the budget, which are supposed to be reconciled and passed before Congress adjourns next week for the Memorial Day recess, explicitly make room for $122 billion in tax cuts. That is down from the $226 billion in tax cuts that Republicans sought last year and is just short of the amount needed to allow a $500-per-child tax credit for six years.

However, House Budget Committee Chairman John R. Kasich (R-Ohio) has said he expects a tax package of some $180 billion in cuts--with the additional $58 billion offset by closing corporate tax loopholes and reviving an expired tax on airline tickets.

“We’re going to have capital gains” tax cuts and probably some more liberal treatment of individual retirement accounts, Kasich said. That could put the House once again into conflict with Senate Republicans, who are much cooler to the idea of a bigger tax cut.

The new Republican budget calls for eliminating the deficit in six years by reducing projected increases in Medicare by $168 billion and Medicaid by $72 billion and by saving $73 billion from welfare and tax credits for the poor and $311 billion from other domestic programs.

Those are smaller savings than Republicans sought in the budget-balancing plan that Clinton vetoed last year. But they are still more than the savings sought by Clinton in his latest budget, which calls for reducing increases for Medicare by $116 billion and for Medicaid by $54 billion and saving $43 billion from welfare and tax credits for the poor and $228 billion from other programs.

Republicans argued that Clinton’s plan is flawed because it would put off until 2002 much of the required deficit reduction and does not specify where some of the reductions will be found.

But Democrats countered with a vigorous defense of Clinton’s record as a deficit hawk, noting that he won congressional approval of a major deficit-reduction package in 1993--without any support from Republicans.

“The president doesn’t have to listen to lectures from people who voted ‘no’ on real deficit reduction in 1993,” Sabo said. “He hasn’t just talked about it. He has done it.”

Before adopting the GOP budget, the House also rejected, 362 to 63, an alternative backed by the Congressional Black Caucus that would have balanced the budget through big cuts in defense spending and closing corporate tax loopholes, while spending more on domestic programs than Clinton or the Republicans proposed.

The House also rejected, 295 to 130, a bipartisan centrist alternative that would have balanced the budget in six years but allowed for no tax cuts.