ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, August 20, 1996 TAG: 9608200012
SECTION: EDITORIAL PAGE: A-5 EDITION: METRO
SOURCE: SCOTT HODGE
THE WHITE House's Office of Management and Budget recently predicted that the federal budget deficit for fiscal year 1996 will come in at around $117 billion - the lowest dollar level since 1981. The Clinton administration was quick to claim credit for deficit reduction.
But think about it: In his budget for 1996 - the one Congress fought the president so hard over this past winter - President Clinton proposed a deficit of $211 billion. Then, he did battle with the conservative Congress. After the battle, and after the new budget began to have its impact, the projected deficit dwindled to $117 billion, nearly $100 billion less than the president called for.
Now, who does that tell you should get the credit for deficit reduction?
Well, let's see - I think Congress might have had something to do with it. Let's put it this way: Can you imagine the kind of deficit we would be looking at if Clinton had been working with a Congress that shares his goals? It would probably come in at around, say, $211 billion.
In fact, the 104th Congress has rejected Clinton's plans for $200 billion deficits well into the next century, it forced him to come up with his own plan for balancing the budget (he had no such plan before locking horns with Congress), and it pushed through substantial cuts of its own.
Furthermore, had the president not vetoed Congress' Balanced Budget Act of 1995, which included $17 billion in entitlement savings for fiscal year 1996, this year's deficit would come in at less than $100 billion, rather than the $117 billion for which he now claims credit.
The spending cutbacks pushed through by Congress in the face of White House opposition have gone practically unreported. Yet thanks to this Congress, fiscal year 1996 discretionary spending - that's federal spending that isn't ``automatic'' as in the case of entitlements like welfare and Medicare - will experience its first decline since 1969.
In addition, Congress eliminated more than 270 separate programs, offices, agencies, projects and divisions. Many other programs, such as the National Endowment for the Arts, the Appalachian Regional Commission and the Legal Services Corporation, had their budgets cut by more than one-third.
It should be noted that if lawmakers in a liberal Congress had compiled a similarly successful record for their agenda, they would be shouting it from the housetops.
Other reasons for the lower projected 1996 deficit numbers include:
The savings-and-loan bailout, which is now generating revenue instead of adding to the deficit. This program - which has accounted for 10 percent of the deficit change between fiscal years 1992 and 1996 - is expected to bring in more than $15 billion in new revenue to the Treasury as assets acquired during the bailout are sold to the private sector.
New revenues from selling the electromagnetic spectrum. Clinton is reaping a windfall from the auction of telecommunications spectrum to private industry, estimated to generate more than $10 billion in new revenues for fiscal year 1996.
A one-time tax-revenue windfall caused by investors cashing in on capital gains because of the rise in the stock market and the possibility of an agreement between Congress and the White House on a cut in the capital-gains tax.
Defense cutbacks. The White House now estimates the government will spend roughly $266 billion on national defense in fiscal year 1996 - $37 billion less than in fiscal year 1992 when the Clinton administration took office. But these cuts merely reflect the fall of the Soviet Union, not any budget austerity on the part of the White House.
The White House's pattern throughout the budget battle with Congress has been to do everything it could to block congressional efforts to cut spending, and then, when it saw it couldn't prevent at least some cuts, to propose compromise budgets it never would have proposed without pressure from Congress. Now that congressional opposition to his agenda has produced a lower deficit, the Clinton administration wants to take the credit.
But, as Paul Harvey is fond of saying, ``Now you know the rest of the story.''
Scott Hodge is Grover M. Hermann fellow in federal budgetary affairs at the Heritage Foundation in Washington, D.C.
- Knight-Ridder/Tribune
LENGTH: Medium: 86 lines ILLUSTRATION: GRAPHIC: D.B. JOHNSON/Los Angeles Times Syndicateby CNB