Budget Bipartisanship Is Sinking Fast

Congress and the White House began the year bubbling with optimism about reaching quick agreement on a balanced budget, but chances for an accord are rapidly sinking into a swamp of resurgent partisanship.

Signs of budgetary malaise are everywhere. Republicans have dropped the conciliatory pose they struggled to adopt when they received President Clinton’s budget in February. Democrats are harassing them for not producing a budget of their own. Senate Budget Committee Chairman Pete V. Domenici (R-N.M.), a deal maker nonpareil, has thrown up his hands at the apparent impasse.

The whole messy scene demonstrates how hard it has become for Congress to make tough decisions in the leadership vacuum created by the escalating Democratic campaign fund-raising controversy and an unsettled power struggle among Republicans in the House of Representatives.

Indeed, divisions within the two parties--not just between them--are among the biggest obstacles to an agreement on the budget.

Democrats are at war with themselves over proposals to slow the growth of Social Security benefits. Liberals are pressing Clinton to oppose a politically risky proposal to change the consumer price index, but many other Democrats think the change is essential to any credible plan to eliminate the federal budget deficit.

Republicans, for their part, have been split over just how much ground they should give to compromise with the White House. And they have openly disagreed among themselves about how hard to push for their party’s cherished tax cuts.

No one has totally written off the possibility of eventually reaching an agreement to balance the budget. Indeed, some see the surge of partisanship as part of the inevitable ebb and flow of negotiations. “Bumps in the road are certainly nothing unusual,” said Lawrence Haas, spokesman for the White House Office of Management and Budget.

But budget writers are hard-pressed to see how the impasse will end. “Both sides are paralyzed,” said Robert D. Reischauer, a budget expert at the Brookings Institution think tank. “The Republicans don’t know how to take a first step, and the president isn’t going to make it easy for them.”

When the year’s budget debate began, both parties seemed to have concluded that the message of the 1996 election was that the voters wanted politicians to cut the partisan rhetoric. A balanced budget suddenly seemed well within reach, thanks to improvements in the economy and reduced partisan tensions.

When Clinton unveiled his budget in February, Republicans were deeply disappointed that he did not go further in cutting federal spending and reducing taxes. But they struggled mightily to mute their criticism in order to avoid poisoning the climate for compromise. They held a carefully staged meeting with Clinton to draw up a short list of issues both sides wanted to address.

Beneath the surface, the two parties were still divided by deep political mistrust and disagreements over budget policy--especially over how deeply to cut taxes.

The facade of bipartisanship crumbled last week. Republicans, saying the president’s budget wasn’t really balanced, pushed a resolution through the House demanding that Clinton submit a new budget. Democrats saw that move as galling because Republicans have yet to produce their own budget.

In a second blow to prospects for a budget agreement, the White House backed away from the idea of setting up an independent commission to recommend changes in the consumer price index. That dashed hopes that Clinton would take the lead on the controversial move, which would take a big chunk out of the deficit.

An independent commission has already endorsed the idea of scaling back the CPI, which economists have concluded overstates inflation. The index has a huge effect on the budget because it is used to adjust federal benefits and taxes for inflation. Both Democrats and Republicans have been reluctant to lead on the issue, for fear their party will face the politically lethal charge that they are trying to cut Social Security benefits.

After Senate Majority Leader Trent Lott (R-Miss.) proposed setting up a commission to recommend changes in the CPI, the Clinton administration flirted with the idea. But White House officials acknowledged last week that they were shelving the idea, at least for now, because it had met stiff opposition on Capitol Hill.

Within Clinton’s own party, leading the charge against changing the CPI is House Minority Leader Richard A. Gephardt (D-Mo.), who is likely to be Vice President Al Gore’s principal rival for their party’s presidential nomination in 2000.

This is a particularly inauspicious time for the White House to provide an opening for Gephardt to position himself as the guardian of the party’s labor and elderly constituencies, which vehemently oppose the CPI change. Gore’s recent admission that he made fund-raising calls from the White House has put him on the defensive and emboldened some of his potential Democratic rivals for the 2000 contest.

The CPI idea may resurface later in the budget debate because a bipartisan coalition of centrists is still pushing it and White House officials have not ruled it out irrevocably.

Republicans, groping for a budget strategy of their own, have broken into open disagreement about the future of the tax cuts that were once the “crown jewel” of the GOP legislative agenda.

In the last Congress, the shots on budget strategy were called largely by the top-down leadership of House Speaker Newt Gingrich (R-Ga.). Now, in the wake of Gingrich’s reprimand on ethics charges, the speaker has been keeping a lower profile. His House lieutenants have been striking out in different directions, a phenomenon that administration officials say makes negotiating with the GOP more difficult.

Most House leaders are sticking to their long-held strategy of keeping tax cuts as an integral part of their budget-balancing scheme. But House Majority Whip Tom DeLay (R-Texas), to the dismay of fellow conservatives, has begun advocating a new approach: put off action on tax cuts until after Congress acts on the spending reductions needed to balance the budget.

Republicans are beginning to contemplate the harsh reality that, if there is no agreement on scaling back the CPI, there may not be enough room in the budget for any tax cuts, let alone the $200-billion package that Lott advocates.