Amid Sunny Rhetoric, Clinton Signs Budget Bill

Exulting that “the sun is rising on America again,” President Clinton on Tuesday signed into law legislation that political leaders say will lead to a balanced budget by 2002 while offering tax relief to millions of Americans.

House Speaker Newt Gingrich (R-Ga.), the Republican leader who in the past has led countless attacks on Clinton and Democratic policies, joined the president at the White House ceremony, which featured the Marine Band playing “God Bless America.” As a crowd of about 1,000 looked on, both Clinton and Gingrich highlighted the bipartisan cooperation that led to passage of the tax and spending bills that constitute the budget accord.

Gingrich praised Clinton and other Democrats for their willingness, following their victory in the 1996 presidential campaign, “to reach out a hand and say, ‘Let’s work together.’ ” The speaker said that “was the key from which everything grew.”

Clearly caught up in the day’s warm-and-fuzzy feelings, Gingrich also pledged to work with Clinton and Democrats in Congress to “make bipartisan progress at home, and . . . provide bipartisan leadership across the planet.”

Yet even as the upbeat oratory poured forth on the White House South Lawn, administration officials were reviewing dozens of esoteric provisions in the tax bill, including tax breaks for interests ranging from Vermont cider makers to Mississippi county clerks. Utilizing for the first time the “line-item” veto power, Clinton can strike specific portions of the bill within five days of signing it.

Although Republicans have long advocated the line-item veto for the president, Gingrich has cautioned Clinton not to violate the spirit of the budget agreement in exercising his new power.

More broadly, some experts predicted future conflict over the budget plan. It includes net tax relief totaling $95 billion and $24 billion in new health care benefits for needy children while relying on large, not-yet-designated savings in other spending areas in order to balance the government’s books by five years from now.

“The unasked question in this euphoria is: ‘How are we paying for all these wonderful things?’ ” said Robert D. Reischauer, a scholar at the Brookings Institution think tank and former head of the Congressional Budget Office.

Despite such difficulties, analysts agreed that the post-budget-deal world will differ markedly from the political period now ending. “We’re going to look back at this year’s budget deal as a dividing line,” said Stanley E. Collender, a Washington-based budget expert.

Before the deal, for example, Washington politicians shied away from long-term fiscal reform of Medicare, the health care program for retirees that faces astronomical costs in the next century as the baby boom generation ages. Democrats, including Clinton, frequently accused Republicans of advocating Medicare limits in order to pay for tax cuts for the wealthy. But in the post-deal world, with Medicare and tax cuts unlinked, such charges are less likely to be heard.

Noting that the agreement calls for creating a Medicare commission that will offer reform suggestions two years from now, Gingrich committed himself to new efforts at fashioning a long-term solution to preserve the program. “I pledge right here . . . that we will work on a bipartisan basis” to enact solutions, he said.

And Clinton has directed White House officials for the first time to consider long-term Medicare proposals as part of the budget he will unveil early next year.

The accord itself provides a glimpse of the future, one that will preserve a large federal government that maintains a keen interest in an array of social services, including a restoration of benefits for legal immigrants that were taken away in last year’s welfare reform act.

“I think that [the children’s health care initiative] could be the foot in the door for Medicare for kids,” said Stephen Moore, an official at the Cato Institute think tank, alluding to conservative fears of a costly new entitlement program emerging as national policy.

Moore added: “The budget deal is a sign that Republicans have lost interest in the agenda of cutting big government.”

At the other end of the spectrum, the Democratic Party’s most liberal elements have derided the deal as providing an inadequate federal commitment to education, training and spending on public-works projects. Indeed, noticeably absent from Tuesday’s bill signing was House Minority Leader Richard A. Gephardt (D-Mo.), who has charged that the budget accord disproportionately helps the rich and hurts the poor.

But some observers contend that Democrats will benefit in the post-deal environment, as their vote for massive tax cuts and a balanced budget frees them, at least partially, from the stigma that their party is traditionally too quick to expand government bureaucracy. The tax legislation includes provisions, such as a reduction in the top capital gains rate to 20% from 28%, that Democrats resisted fiercely in the past.

For the moment, however, it appears the public is skeptical about the optimistic claims of the White House and Congress about the agreement, such as Clinton’s description of it as “a true milestone for our nation.”

A recent survey by Time magazine and CNN found that fewer than one in three Americans believed they would benefit personally from the legislation. In addition, 62% found it unlikely that the plan actually would lead to a balanced budget by 2002.

Perhaps that is why Clinton sought to put the spending blueprint in down-to-earth terms Tuesday, arguing that it will directly affect households around the nation. “Because we have acted, millions of children all across this country will be able to get medicine and have their sight and hearing tested, and see dentists and doctors for the first time,” he said, alluding to the $24-billion initiative in children’s health.

Using rhetoric reminiscent of the “Morning in America” slogan from the Reagan administration, Clinton also cited the shrinking deficit and strong U.S. economy as refutation of the view held by some scholars, especially in the 1980s, that America was in decline.

“We can say with pride and certainty that those who saw the sun setting on America were wrong,” Clinton said, shortly before opening two blue folders and signing the bills into law. “The sun is rising on America again.”