In Budget Game, Clinton Is Holding All the Best Cards

Entering his last year-end budget tussle with the Republican-controlled Congress, President Clinton commands a strong bargaining position that belies any notion he is hobbled by lame-duck status, analysts say.

That is, in part, because GOP congressional leaders are divided among themselves about how best to navigate the unfamiliar world of budgeting with a big federal surplus. But Clinton also seems to enjoy the upper hand because he is in no hurry to close a budget deal. Republicans are eager to wrap up the session’s business so they can return home and focus on their reelection campaigns and their goal of retaining control of Congress.

“Clinton has enormous leverage,” said Robert Bixby, president of the Concord Coalition, a nonpartisan group that advocates fiscal restraint. “The Republicans ultimately will have to give him just about everything he wants.”

The likely result is a federal budget that increases spending more than any year since the GOP took control of Congress in 1995. With control of the House and Senate at stake in November’s vote, Republicans are spending freely on home-state projects to help their own members. But in addition, much will be spent on items favored by Clinton to put the finishing touches on his presidential legacy.

Late last week, for example, Republicans agreed to provide a large infusion of money for Clinton’s signature land-conservation initiative. They are moving to provide the extra money he sought for the Internal Revenue Service. And they already have approved more funds for education programs than the president requested--although GOP leaders and administration officials are haggling over how exactly to spend it.

In his national radio address Saturday, Clinton pressured Republicans to accept his proposal to earmark education funds to rebuild crumbling schools, an issue that has been a focus of recent negotiations between top Republican officials and White House Budget Director Jack Lew.

“The Republican leadership continues to stand in the way and refuses to bring it to a vote,” Clinton said in his radio address. “Every day they stall is another day our children are forced to go to school in trailers, overcrowded classrooms and crumbling buildings.”

After seven years of dealing with wily White House negotiators, many Republicans head into their last major argument with Clinton on government spending almost assuming that they will have to capitulate.

“Our position has deteriorated in each of the last couple of budget fights,” said Rep. Marshall “Mark” Sanford (R-S.C.), a fiscal conservative who is retiring from Congress this year. “People are simply resigned to the fact that he holds most of the cards.”

The GOP will not roll over on every issue. For example, Congress is about to send Clinton an energy spending bill that he has threatened to veto over a provision involving the flow of the Missouri River that the administration thinks is bad for endangered species.

And Republicans have tried to impose a cap on how much new spending Clinton could win by insisting that 90% of the budget surplus be used to pay down the national debt, which would leave only about $28 billion available for new spending and tax cuts in year-end budget talks.

Republicans have portrayed this “90-10” formula as a prescription for fiscal restraint, but it still would leave room for a significant spending increase. Under that scheme, spending could rise from $618 billion in 2000 to at least $650 billion in 2001, according to an estimate by the Concord Coalition. That would shatter the $625-billion spending limit Congress set in the 2001 budget resolution adopted earlier this year.

Republicans acknowledge that the surplus is tempting even for GOP members who for years preached fiscal conservatism.

Robert Stevenson, spokesman for the Senate Budget Committee, noted that past federal deficits served as a restraint on spending. “Now that we’re in surplus, there are some pent-up demands,” Stevenson said.

“There’s a huge spending spree going on,” added John Scofield, spokesman for the House Appropriations Committee. “It’s bipartisan. It’s bicameral. It’s both ends of Pennsylvania Avenue.”

Even with all the extra money to play with, the always-contentious congressional budget process is especially snarled this year. As the new fiscal year begins today, only two of the 13 appropriations bills needed to keep the government running had been signed into law. A stopgap budget bill is in effect until Friday. The logjam has been so intractable that in the four weeks since Congress returned from its summer recess, not a single money bill has been sent to Clinton.

Republicans blame Democrats--especially in the Senate--for slowing the process with relentless delaying tactics. But the backlog also has engendered tensions within the GOP: House Republicans angrily accuse Senate Republicans of foot-dragging that is insensitive to the party’s political needs.

“The senators don’t care that we have tough elections” as the GOP seeks to keep its slim House majority, said Rep. Ray LaHood (R-Ill.). “Their priorities are not ours. Getting out of town in a timely fashion--that’s our No. 1 priority.”

It remains early in the budget endgame to size up winners and losers, but signs are favorable for Clinton in several areas:

* A top White House goal has been increasing the fund for the ambitious land conservation initiative. Under last week’s agreement, the program will get $1.6 billion in fiscal 2001--up from $742 million this year. And the funding will rise to $2.4 billion in 2006. Republicans did not go along with Clinton’s request for a 15-year commitment to the program, but Rep. Norman D. Dicks (D-Wash.) said the accord represented a significant increase in conservation spending.

* Republicans drafted the Treasury Department’s appropriation bill with $300 million less than the $8.9 billion Clinton wanted for the IRS and counterterrorism programs, prompting veto threats from the administration. For that and other reasons, the Senate rejected the bill earlier this month. Now, GOP leaders are looking for ways to add the money the administration wants to salvage the bill.

* Republicans, who came to power in 1995 calling for abolition of the Education Department and eliminating many federal education programs, now are bragging that they will provide at least as much for education as Clinton has sought. However, although Clinton wants to specify that $1.3 billion be spent for school repair and $1.8 billion for the next installment of his plan to hire 100,000 teachers, Republicans want to provide funding in less targeted grants that would allow states to use the federal money for a variety of education needs, including teacher salaries.

* Another GOP target for elimination was the National Endowment for the Arts, but Republicans now are moving to approve an increase in the agency’s budget. The NEA, under fire from conservative critics offended by some of the projects it funded, had its budget cut in half in 1995 and has seen no increases since then. But negotiators last week agreed to increase NEA’s annual funding from $98 million to $105 million. That is, however, less than the $150 million Clinton requested.

* House-Senate negotiators seem prepared to embrace a new, stricter standard for measuring drunken driving--an issue that Clinton has made a top priority in negotiations over the Transportation Department’s appropriation bill. Details of the compromise--which is expected to implement over a number of years a national drunk driving standard of a 0.08% blood-alcohol level--have not yet been disclosed, but the measure is expected to come before the House and Senate this week. Most states consider a driver impaired with a 0.10% blood-alcohol level, but some already use a 0.08% standard, including California.