Rancor Rises as Surplus Estimates Drop

Congressional leaders clashed on Sunday over the implications of falling estimates of the federal budget surplus, with Republicans denying Democratic charges that they will have to tap Social Security funds to keep the budget in the black.

“I hate to say I told you so, but we told you so,” Senate Majority Leader Tom Daschle (D-S.D.) said on ABC’s “This Week” program.

“We know those funds have already been committed. We know we’re going to need them. So to use them for any other purpose is a deceit, is a shell game that we can’t afford,” Daschle said. “But that’s what the administration is now saying will be their only recourse because of the shortfall in the budget.”

In debate over President Bush’s recently enacted 10-year, $1.35-trillion tax cut, Democratic leaders argued the cut would risk the budget surplus. The first part of that tax cut, a reduction in the government’s share of withheld taxes from paychecks, went into effect Sunday.

In June, the Congressional Budget Office lowered its surplus estimate from $275 billion for the budget year ending in September to $200 billion, noting declining corporate tax receipts and the cost of the initial portion of the tax cut. The figure included money from Social Security, even though both parties have said the trust fund is off limits for use in paying for general government functions.

On Friday, White House economic advisor Lawrence B. Lindsey said the administration is also lowering its surplus projection to about $200 billion, attributing the drop to the slowing economy.

Daschle said the shortfall was instead due to the tax cut and “we’ve got to find a way to deal with that.”

Republicans were quick to take issue with Daschle’s charge.

Rep. Dick Armey, House majority leader, said Republicans have no intention of dipping into Social Security and instead favor cutting federal spending to ensure surplus targets are met.

“The House of Representatives are not going to go back to raiding the Social Security and Medicare trust funds. Tom Daschle can go that way in the Senate but it will not happen in the House,” Armey, a Texan, vowed on CNN’s “Late Edition.”

“You can’t take the tax cut back from the American people, so let’s get busy and get serious about how we spend people’s money and hold the line on spending,” Armey said.