Senate Republicans’ Budget Would Reduce Taxes, Debt

Senate Republican budget writers Tuesday unveiled their plan to cut taxes by up to $778 billion over 10 years, set aside Social Security surpluses, boost defense and education and keep reserves that could be used for Medicare reforms.

The Republicans would use the $1.8 trillion in projected Social Security surpluses over the next decade only to reduce the national debt. Reducing that debt would strengthen the economy, making it easier, they said, for the government to raise money that can be used to pay Social Security and Medicare’s swelling ranks of beneficiaries.

Even so, Democrats were planning to attack Republicans for failing to reserve 15% of expected surpluses for Medicare, as President Clinton proposed in the budget he released last month.

Senate Budget Committee Chairman Pete V. Domenici of New Mexico said his plan would stay within spending limits set by the balanced-budget agreement.

But committee Democrats blasted the plan as a sham that would give tax cuts to the wealthy at the expense of Medicare and other domestic programs.

The Democrats were expected to push a number of amendments on Medicare protections, deflecting tax cuts, sustaining nonmilitary spending and other issues as the panel takes up the budget plan today.

The plan, which covers about $536 billion in spending next fiscal year, is not legally binding but is the blueprint that Congress follows for tax laws and for the 13 spending bills that run the government from year to year.

The House Budget Committee was to start work on a similar budget plan today.

Republicans are pushing their tax cuts as a counter to Clinton’s call to use most of the projected surpluses in coming years to preserve Social Security and Medicare for aging baby boomers.

Domenici insisted that his plan would do more to protect those programs than Clinton’s, and still allow $15 billion of tax cuts in fiscal 2000, growing to $778 billion over 10 years from surpluses outside Social Security.

Domenici suggested that the so-called marriage penalty could be eliminated from the tax code. He also said some expiring corporate tax credits could be extended.