Clinton Cool to New GOP Budget Ideas

Republicans presented the Clinton administration Wednesday with new offers on tax cuts and budget-balancing savings, but White House officials were lukewarm, and Senate Minority Leader Tom Daschle (D-S.D.) flatly predicted a veto of the tax plan.

The GOP embraced two items fiercely opposed by the White House. They would exempt from tax the portion of capital gains caused by inflation and refuse to provide lower-income working families with the $500-a-child credit if their income tax liability has been wiped out by other credits.

Daschle dubbed the Republican child tax-credit plan “veto bait,” adding, “What we’ve seen so far is very discouraging because it does move farther and farther to the right and away from the middle, where we hoped to be by the beginning of these negotiations.”

On the separate spending package, Republicans unveiled a slew of proposals on Medicare, Medicaid, welfare and children’s health care that tilted away from provisions the administration would prefer. These included GOP plans to give states large amounts of discretion over how to spend billions for welfare and children’s health, according to documents Republicans distributed at the talks.

The Republican offer omitted dramatic Senate-approved Medicare changes that have drawn bitter objections from the House GOP, making their survival unlikely. These were proposals to slowly boost the program’s eligibility age from 65 to 67, impose steeper costs on higher-income recipients and charge $5 for every home health care visit.

Meanwhile, the House on Wednesday rejected an attempt by rank and file members to put enforcement teeth in the balanced-budget deal.

The so-called Budget Enforcement Act, defeated 347-81, was opposed by Democrats concerned it could lead to smaller Social Security benefits and by Republicans worried it would strip away the tax cuts they have been pushing for.

The measure, sponsored by a coalition of fiscal hawks from both parties, would have required Congress and the White House to act if revenue or spending targets are not met in the plan to balance the budget by 2002.