ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Friday, February 7, 1997 TAG: 9702070076
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: From The Boston Globe and The Washington Post
President Clinton sent Congress Thursday a five-year plan to balance the federal budget for the first time since man set foot on the moon, a $1.69 trillion spending plan for next year that cuts taxes for the middle class, extends health care to more poor children and yet claims to wipe out budget deficits by 2002.
The four-volume plan - 2,424 pages in all - comes as Clinton is trying to convince lawmakers the nation can cut its spending to match receipts without a balanced budget amendment to the Constitution. His plan relies heavily on savings in the years 2001 and 2002, when he is out of office, however.
His proposal says the budget deficit will rise 17 percent this year before tailing off and creating a $17 billion surplus in 2002. Republicans challenged Clinton's math Thursday and claimed the balancing act was illusory.
Clinton said, ``the lion's share of the savings that we needed to make from the nightmarish projections we had four years ago have been put in place already and it remains for us to take the last steps.''
His five-year plan relies on $100 billion in savings from Medicare and $22 billion from Medicaid; $76 billion from extended or new taxes on businesses and airline tickets; $47.3 billion from new user fees; $36.1 billion from the sale of broadcast spectrum licenses; and a host of cuts in defense and general government spending.
The president's budget is an initial negotiating stance for the months of give-and-take to follow with the Republican-led Congress.
Clinton proposes $98 billion in tax cuts over five years, including tax breaks for college tuition, relief from capital gains taxes when people sell their homes and a $500 tax credit for children. The child tax credit phases out for families with income between $60,000 and $75,000.
Republicans want tax cuts twice as large. They also say health care providers would shoulder too much of the Medicare cost cuts, and beneficiaries too little.
Yet in contrast to the past two years, when Republicans berated Clinton's balanced-budget proposals as hollow promises, his latest plan received a polite, though skeptical, reception on Capitol Hill. Stung by the public backlash to government shutdowns and Clinton's re-election, House and Senate leaders signaled a willingness to accommodate large chunks of the president's agenda, provided the budget is shorn of what some describe as gimmicks and overly optimistic economic forecasts.
``Well, I suppose that you could say it's alive, but it's definitely not kicking,'' Senate Majority Leader Trent Lott, R-Miss., said. Lott said he found ``some encouragement'' in the plan, though he ticked off criticisms that led him to conclude that, ``it appears that the president's budget fails several of these credibility tests.''
``I'm not dumping on it,'' said Pete Domenici, R- New Mexico, chairman of the Senate Budget Committee. ``As a matter of fact ... this is a very good starting point.''
Overall, the president called for 3.5 percent more in spending next year than the amount projected for this year.
He would restore $21 billion of the $55 billion in savings from last year's overhaul of welfare laws, much of it to revive benefits for legal immigrants. He called for a significant increase in spending on education and small increases for AIDS and breast cancer research and to put more police on the streets. He asked for part of the $3.5 billion needed to keep troops in Bosnia another 18 months.
Clinton also took a step to mute one of the more divisive elements of recent budget debates: whether to use economic forecasts from the White House or the Congressional Budget Office.
If the White House predictions of economic growth and inflation are correct, then Clinton's plan would stand. If congressional predictions are correct - and the president's plan can no longer lead to a balanced budget - then $22 billion of Clinton's tax cuts would be rescinded, and all programs except Social Security would be cut by 2.25 percent. ``With this mechanism, the American people can rest assured that we will reach balance in 2002 no matter which set of assumptions are used in the budget process,'' Clinton said.
LENGTH: Medium: 79 lines ILLUSTRATION: GRAPHIC: Chart by AP.by CNB