Surplus or Not, Congress Struggling to Cut Corners

It’s the silly season in Congress, with some deadly serious issues at stake.

Like a college student who puts off a term paper until an eleventh-hour all-nighter, the House and Senate are barreling toward an Oct. 1 deadline for writing the details of the new federal budget. So far, lawmakers have barely written the topic sentence. Only four of the 13 spending bills needed to keep the government running have been sent to President Clinton. Meanwhile, one of the biggest bills--which funds a host of education, health and social programs--has yet to be drafted.

The problem is simple to understand: shoe-horning a raft of popular spending items into strict budget limits that Congress imposed on itself two years ago. But lawmakers are having an extraordinarily difficult time figuring out how to do that.

The effort has turned the Capitol into an open-air bazaar of ideas on how to cut spending--or cook the books so it looks like they have. The result is cacophony in the halls of Congress: Slash NASA’s budget! Abolish the Selective Service! Take back welfare money from the states! Or maybe just postpone writing government checks for a month or two.

Each of these proposals has been on the table. And there should be plenty more in coming weeks as lawmakers fight among themselves and with President Clinton as they confront a dizzying kaleidoscope of decisions that affect government programs from the Pentagon to highways to biomedical research. If they don’t reach agreement by the Oct. 1 start of the fiscal year, they will have to go into overtime with a temporary budget--or else parts of the government will grind to a halt.

Even before Hurricane Floyd made landfall, House Majority Leader Dick Armey (R-Texas) said the budget dilemma reminded him of a Jimmy Buffett song: “Trying to Reason With Hurricane Season.”

The whole scene is, in one way, utterly baffling. Congress is abuzz with frantic efforts to cut spending just as the government was supposed to be entering an era of fiscal plenty, with the next decade awash in the black ink of budget surplus.

The explanation stems, in part, from a quiet consensus that Clinton and Congress reached months ago to end the decades-long practice of using surplus Social Security revenues to pay for other programs or tax cuts. It was a meeting of the minds that is often overlooked because the issue was settled without a big fight. But its bottom-line result was a pledge to prevent the bulk of the surplus from being spent on anything next year.

So now that bipartisan promise to fence off Social Security has left Clinton and Congress with little leeway to throw money at their political problems. Of the $161-billion budget surplus expected in the coming fiscal year, only $14 billion is outside Social Security. And according to the Congressional Budget Office, lawmakers already have used up that surplus if the House and Senate stick to funding decisions they have made so far.

The coming weeks will be a big test of both sides, demonstrating whether their fealty to Social Security helps them resist the timeless allure of more government spending in other areas. Both sides will be tested not only by political pressure but by acts of God and acts of war. Fiscal pressure will increase, for example, if Congress has to appropriate additional money to help victims of Hurricane Floyd. A $7-billion package of aid is in the works to help farmers battered by this year’s drought and the sagging farm economy. Clinton is expected soon to ask for additional funding for peacekeeping troops in Kosovo.

While Republicans say that they are trying to hold the line on spending, they are quietly retreating from an earlier promise: to hold spending below the caps set by the 1997 budget-balancing agreement. That law set a series of annual spending ceilings that, for the first two years, were relatively easy to meet. But they are pinching this year with unusual force.

Although Republicans have talked a lot about cutting government spending since they took control of Congress in 1995, they made good on that promise only in their first year in power. Now, with far less political impetus behind the cause of cutting popular programs than there was in 1995, Republicans are under pressure to cut more than ever.

So, for example, Congress has almost never cut funding in the annual spending bill that covers some of the government’s most popular social programs, including education, health research and job training grants. Now, strict adherence to the budget caps would force Congress to cut $16 billion from an $89-billion spending bill for education, health and labor programs.

Republicans essentially have conceded that they will have to get around the spending cap somehow, and they plotted late last week about how to do that.

Some of the GOP’s budget-cutting ideas are perennials, such as proposals to abolish Clinton’s treasured national service program. But this year’s squeeze forced Republicans to consider trimming previously protected programs, such as the National Aeronautics and Space Administration, the National Science Foundation and the federal court system.

But as the Oct. 1 deadline approaches, more of the GOP ideas have amounted to efforts to hide rather than cut costs. Many of those maneuvers have opened big divisions among Republicans themselves. One proposal called for providing more money for the education, labor and health spending bill by requiring states to return some $6 billion in unspent welfare money. GOP governors howled, and the idea was scotched.

Another trial balloon floated by House Republicans was to delay tax credit payments to the working poor. Senate Appropriations Committee Chairman Ted Stevens (R-Alaska) quickly took the air out of it. “Dead on arrival,” he declared.

Stevens, for his part, has proposed counting some of the money appropriated this year against next year’s budget. That’s what budget experts call “forward funding.” Critics said it amounted to inventing a 13-month year. Despite objections from some House Republicans, that ploy and other bookkeeping maneuvers will likely be a big part of how the GOP avoids punishing cuts in social programs.

Already, Republicans have deployed other accounting gimmicks to ease the difficulty they are having in keeping spending within the budget caps. The House provided $4.5 billion for conducting the 2000 census, and the Senate provided $7.4 billion to help farmers but designated the money as “emergency spending” so it would be exempt from the budget caps. But that extra spending eats up most of the $14-billion surplus.

And adding to Congress’ budget woes, the “emergencies” keep coming. The damage caused by Hurricane Floyd--and how much Congress will have to appropriate in disaster assistance--has yet to be calculated. And this is still early in hurricane season.

Even the GOP’s staunchest conservatives are not playing down the difficulty of their budget dilemmas. “We’ve sort of bumped into a wall,” Armey said.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Status of spending bills for the federal fiscal year starting Oct. 1

Agriculture -- House and Senate passed differing versions; lawmakers working on compromise.

Commerce, Justice, State -- House and Senate passed differing versions; lawmakers working on compromise.

Defense -- House and Senate passed differing versions; lawmakers working on compromise.

District of Columbia -- Bill sent to President Clinton

Energy and Water Development -- House and Senate passed differing versions; lawmakers working on compromise.

Foreign Operations -- House and Senate passed differing versions; lawmakers working on compromise.

Interior -- House passed its version; competing measure pending in Senate.

Labor, Health and Human Services, Education -- Not yet drafted.

Legislative Branch -- Bill sent to Clinton.

Military Construction -- Signed into law.

Transportation -- House and Senate passed differing versions; lawmakers working on compromise.

Treasury, Postal Service -- House passed its version; competing measure pending in Senate

Source: Congressional Quarterly