Republicans Blast Clinton Budget

Republicans took the offensive Tuesday against President Clinton’s new $1.77-trillion budget, proposing a $743-billion income-tax cut and accusing the White House of advancing a dubious plan to save Social Security.

House Budget Committee Chairman John R. Kasich (R-Ohio) introduced the 10-year plan to cut personal income tax rates by 10%.

Corporate income and Social Security taxes would stay the same.

“Families, not Washington, deserve more power and money,” said Kasich, a potential presidential candidate next year.

As expected, the plan drew fire from Democrats.

They said the legislation would deplete the nearly $800-billion non-Social Security surplus over 10 years and may eat into the retirement fund within five years, depending on the structure of the tax cut.

Republicans said the bill would save a family with taxable income of $90,000 a year almost $2,000, while a family earning $20,000 a year would save $300.

Democrats said the plan would benefit the richest Americans the most, at the expense of middle- and low-income taxpayers.

Rep. Charles B. Rangel of New York, the ranking Democrat on the House Ways and Means Committee, said the Republican plan would actually hurt the U.S. economy by spending the surplus rather than paying down debt.

Instead of an across-the-board tax cut, Clinton’s fiscal 2000 budget released Monday proposed targeted tax breaks and credits to help parents pay for child care and spur investment in poor areas.

Clinton wants Congress to set aside the surplus to shore up Social Security, bolster the Medicare program for the elderly and fund “universal savings accounts” to help people save for retirement.

White House officials argue that reserving trillions in budget surpluses for Social Security would extend the date the program would deplete its trust fund from 2032 to 2055. Under the plan, the government would put special Treasury bills into Social Security’s trust fund--in effect promising that the surplus money will be used to help Social Security.

Lawmakers were skeptical of Clinton’s plan to use most of the $4.85 trillion in federal surpluses projected for the next 15 years to shore up Social Security.

Following a long tradition of grilling administration officials the day after the budget is released, Republicans summoned Treasury Secretary Robert E. Rubin to the Finance Committee and White House Budget Chief Jacob Lew to the Senate Budget Committee.

Lew conceded that the Social Security plan was “complicated.” But he said the Treasury bills Social Security would receive would be assets that are “very real” because they would be backed by surpluses, assuming they occur as projected.

Nonetheless, Lew heard much the same criticism Rubin did. Republicans said Clinton was double-counting surpluses that come mostly from the Social Security trust funds in the first place.