Study Finds Budget Does Include Loan

Despite bipartisan promises to preserve the sanctity of the Social Security funds, the federal budget recently passed by Congress will borrow $17 billion in Social Security revenue for other programs, a new report said Thursday.

The report by the nonpartisan Congressional Budget Office belied much-touted claims by GOP congressional leaders and President Clinton that, for the first time in decades, the budget would leave Social Security surpluses untouched.

However, CBO officials predicted that the booming economy would improve the budget picture and reduce the drain on Social Security by the time they revise projections in January. That optimistic note was seized by Republicans as grounds for claiming that ultimately they will keep their Social Security promise.

“Regardless of what the projections indicate now, the surplus numbers are going to get better,” said Wayne Struble, staff director of the House Budget Committee. “We’ll see next year sometime how we did.”

And even if the budget missed the mark by $17 billion, just the fact that Clinton and Congress agreed to the goal of trying to fence off Social Security trust funds was a monumental shift in government fiscal policy. For decades, other government programs and operations have been partly financed by Social Security trust funds.

Responding to the CBO report, House Minority Leader Richard A. Gephardt (D-Mo.) said: “It’s now perfectly clear the Republican legislative cupboard from 1999 is bare--except for empty promises.”

But the White House response was more muted. “These are just projections,” said presidential spokesman Joe Lockhart, “and we’ll just have to wait and see as we get into next year.”

The CBO report is the most authoritative assessment to date of the expected fiscal effect of the final wrangling over the budget, which totals $1.7 trillion.

The report acknowledged that it would not have shown Social Security funds being tapped if it had adopted some of the accounting techniques and assumptions recommended by GOP congressional leaders. But CBO officials said they disagreed with those methods.

The Republican promise to craft a budget that would safeguard Social Security surpluses--using them only to buy down the national debt--emerged as the party’s central point of pride on Capitol Hill this year. “Our budget stopped the raid on Social Security for the first time in 30 years,” House Speaker J. Dennis Hastert (R-Ill.) said as the session adjourned last month.

But even as the debate continues over whether the current budget will draw on Social Security funds, the CBO report underscores that next year is likely to produce another round of headaches for Congress. That is because one way lawmakers coped with this year’s spending crunch was by “advance funding” programs--counting some of the money appropriated this year against next year’s budget.

The CBO calculated that if Congress continues spending in the next budget at this year’s level, it will drain $19 billion more from Social Security surpluses.

“That means trouble for next year’s budget,” said Rep. John M. Spratt Jr. (D-S.C.).

It also could mean trouble for the tax cut plan unveiled earlier this week by GOP presidential front-runner George W. Bush, a plan that assumes federal surpluses will be even bigger than the CBO has been forecasting.

“Those surpluses don’t exist yet,” said Spratt.

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Times staff writer Edwin Chen contributed to this story.