House OKs Budget With More Tax, Cost Cutting

The House, bridging bitter divisions among Republicans, approved a budget Friday that would cut taxes and spending far more than in last year’s landmark budget-balancing agreement between the White House and GOP leaders.

The budget, which was approved, 216 to 204, calls for cutting spending by $101 billion over five years and using the proceeds to cut taxes on couples hit by the so-called marriage penalty.

The House vote increases the likelihood that Congress will produce a tax cut this year--and possibly force an election-year confrontation with Clinton over the issue.

Many Republicans in the House believe that their party must make a stronger statement about low taxes and small government than last year’s balanced budget deal allows.

“We don’t want to forget the reason why people sent us here,” said House Budget Committee Chairman John R. Kasich (R-Ohio), the architect of the budget and a possible candidate for president in 2000. “We came to make the government budget smaller and the family budget bigger.”

However, the budget was approved only after a frantic eleventh-hour campaign of arm-twisting by House Speaker Newt Gingrich (R-Ga.) and other GOP leaders, who faced a rebellion by party moderates fearful of supporting another round of spending cuts in politically popular programs, especially in an election year.

After leaders made a series of promises to appease critics, only nine Republicans voted against the budget. Three Democrats voted for it. The votes of the California delegation also split largely along party lines. The only state Republicans to vote no were Reps. Brian Bilbray (R-San Diego) and Tom Campbell (R-San Jose).

The Clinton administration and House Democrats attacked the GOP budget as a throwback to the anti-government policies Republicans pushed after they first took control of Congress in 1995, when their confrontations with Clinton led to two unpopular government shutdowns.

President Clinton, traveling in Massachusetts, issued a statement calling the House Republican budget “an unfortunate step backwards that would mean severe and unnecessary cuts in education, the environment and health care.”

“It’s a step backward to the failed Republican policies of 1995 and the 1980s,” said Linda Ricci, spokeswoman for the Office of Management and Budget. “It’s a recipe for gridlock and contains unrealistic and unfair cuts, promising what it cannot deliver.”

“This Republican budget picks on those who are the most vulnerable in our society,” said Rep. Joe Moakley (D-Mass.), citing proposals to curb such domestic programs as welfare and Medicaid.

The House vote also puts Gingrich and his allies at odds with their GOP counterparts in the Senate, which has approved a budget that sticks to last year’s budget-balancing agreement and makes room for only $30 billion in tax cuts. Gingrich predicted Senate Republicans could be persuaded to accept more spending and tax cuts--though perhaps not the full $101 billion--when House and Senate negotiators meet to iron out differences between the two chambers’ budgets in coming weeks.

“We’ll be maybe slightly less conservative by the time we’re done with the Senate. The Senate will be a good bit more conservative by the time they’re done with us,” said Gingrich.

The budget is a broad blueprint that sets spending ceilings and revenue targets for the fiscal year that begins Oct. 1. Later this year, Congress will pass separate spending and tax bills to carry out the particulars.

So, while the budget resolution suggests that the $100-billion allotted for tax cuts be used to reduce the marriage penalty--a quirk in the tax code that forces many married couples to pay more in taxes than if they were single and filing separately--it will be up to House and Senate tax-writing committees to propose exactly which taxes to cut. House Ways and Means Chairman Bill Archer (R-Texas) has made clear that he had in mind other tax cuts in addition to the marriage penalty, such as a further reduction in capital gains taxes.

The House’s $1.7-trillion budget projects a $34-billion surplus in the coming fiscal year. That’s down from the $55-billion surplus projected for this year. The budget specifies that this year’s surplus be used to pay down the national debt but that future surpluses be used to cut taxes.

The House budget would allow spending increases for the Pentagon, but defense hawks said it is not enough to keep pace with inflation. But because defense spending would not be cut, all of the proposed $101 billion in savings would have to come from domestic programs.

Kasich argued that the spending cuts amount to a mere 1% of a budget that totals $9 billion over five years--a small sacrifice to ease the tax burden on families by reducing the marriage penalty.

“If we cannot save a penny on every dollar, we are telling the American people the government is more important than they are,” said Kasich.

But many Republicans resisted another round of controversial spending cuts, preferring to approach their reelection campaigns on the strength of the budget and tax bills passed last year.

“We have not yet completed the first year of the agreement,” said Rep. Michael N. Castle (R-Del.), leader of a faction of moderate Republicans who opposed the budget. “Let’s give it a chance to work.”

In their frantic effort to build support for the measure, GOP leaders promised wavering lawmakers that objectionable provisions would be moderated in negotiation with the Senate. Gingrich told Rep. E. Clay Shaw (R-Fla.) that the budget’s proposed $10-billion cut in welfare would be scaled back. He told defense hawks that he would find more money for the Pentagon.

Kasich assured Washington-area Republicans that the budget would not cut health benefits for federal employees and told House Transportation Chairman Bud Shuster (R-Pa.) that he would drop a proposed trim in highway spending and instead make room for a big increase.

All the horse-trading led Rep. John M. Spratt Jr. (D-S.C.) to doubt whether the House budget was worth the paper it was written on. “We have seen this budget come unraveled piece by piece. These cuts are not going to happen.”