One Budget: Many Interpreters

When President Clinton’s new federal budget hit the desks in Congress, Republicans proclaimed that the days of big government and taxing and spending were back. Most of the GOP concerns are based on Clinton’s proposed $150 billion in new initiatives.

Well, there are many ways of analyzing a $1.7-trillion budget. The liberal Center on Budget and Policy Priorities has looked at the same blueprint and notes that the 1999 budget means government will continue to shrink as a share of the national economy. And taxes will be slightly lower as a percentage of income. Further, the center’s assessment says, increased spending would not be $150 billion but only $82 billion through 2003. The $150-billion figure includes the costs of Clinton’s proposed new tax credits, an item not normally counted as a budget outlay. The new spending is to be offset by reductions in other parts of the budget and, prospectively, by a federal settlement with the tobacco industry that may or may not include a new tax on tobacco, and may or may not get past Congress.

As for taxes, Clinton’s critics point to a Congressional Budget Office report that taxes now equal 19.9% of the economy, the highest since 1974. That’s true, but largely due to people turning over investments in a bullish stock market and paying high capital gains. The proposed budget would raise $23 billion in new revenues by closing loopholes and proposes $24 billion in new tax cuts. But over the next five years, the federal tax burden on an average family would decline, supporters say.

Some criticisms focus on practices that are not unique to this budget. For instance, the nonpartisan Concord Coalition notes critically that Clinton is able to balance his budget by using some of the current surplus in the Social Security fund. But that practice dates back through the 1980s and several administrations.

In every year with a deficit, the growing cost of servicing the debt forced the budget up and made it appear that government was getting bigger. Perhaps the best way to measure the size of government is to chart discretionary spending, the nuts-and-bolts core of government excluding defense, Medicare and Medicaid. That figure now is about 10% of the gross domestic product, its lowest point since 1971, and is expected to remain at that level for the next several years. The Clinton budget may have unrealistically counted on the tobacco money, but its overall spending does not appear to be a symptom of mushrooming government.