THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, May 19, 1995 TAG: 9505190692
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: FROM WIRE REPORTS
DATELINE: WASHINGTON LENGTH: Long : 142 lines
House Republicans delivered on the heart of their ``Contract With America'' campaign promises Thursday by approving a budget designed to eliminate the deficit within seven years, slash taxes and dismantle large chunks of the federal bureaucracy.
Gambling that voter enthusiasm for deficit reduction won't sour when Congress actually begins cutting popular programs later this year, Republicans overwhelmingly embraced their leaders' blueprint to radically scale back social spending and shrink government.
``Our vision for the 21st century is taking power and money and control and influence from this city and giving it back to men and women all across this country,'' said House Budget Committee Chairman John R. Kasich, R-Ohio.
The White House promptly stated its opposition to the plan. ``The president is eager to work with Congress to ensure a disciplined budget that reduces the deficit and reflects the values of the American people,'' White House spokesman Michael McCurry said. ``The House budget fails to meet that test.''
Attention now turns to the Senate, which began debate on its own balanced budget plan Thursday. Controversy there is likely to center on tax policy. The budget approved by the Senate Budget Committee makes room for a tax cut only half the size of the House-passed tax cut, and some Senate Republicans want to change that during floor debate. A final vote in the Senate is likely next week.
Capping two days of debate, the House voted 238-193 to approve the plan, with eight conservative Democrats joining Republicans.
The Republican budget-balancing plan allocates $350 billion over seven years for the tax cut approved by the House earlier this year, a decision that was made despite relentless criticism from Democrats and reservations in some Republican quarters.
Altogether, the plan calls for about $1.4 trillion in savings through 2002, including $282 billion from slowing the growth of Medicare and $17 billion from curbing farm subsidies. It also would abolish hundreds of federal programs and agencies and cut spending for hundreds of others: from mass-transit subsidies to food stamps to the National Endowment for the Arts.
The plan would grant a $500 tax credit per child for families earning up to $200,000 a year, cut capital gains taxes and remove the ``marriage penalty,'' under which a married couple pays more in taxes than two single people with the same combined income.
Before Thursday's vote, the House easily dismissed alternative proposals for a balanced budget offered by a coalition of conservative Democrats and by the Congressional Black Caucus that would have scrapped the proposed tax cut and spent more for key programs.
The budget resolution is just the first step in a long policy-making process that will stretch through the summer and into the fall. The budget sets revenue targets and spending ceilings for broad categories of federal activities.
Other committees must draft legislation to make the potentially painful spending cuts and policy changes needed to bring outlays in line with those targets.
One of the most difficult tasks may be devising a specific plan for how to save $280 billion in spending for Medicare, the popular but costly government health program for the elderly.
In the end, the Republicans must present a final budget with enough Democratic support to mollify President Clinton, who is solidly opposed to some major components of the plan and may well veto parts of it.
``This is the beginning of six months of hard work, and not the end of a process,'' House Speaker Newt Gingrich, R-Ga., said after the House vote. ``We have to turn this into reality.''
The tax reductions, which the House's Democrats called a gift to the nation's monied class, were the bone of the two-day debate that amounted, at most times, to a struggle for the hearts and minds of the nation's broad middle class.
Democrats cast the Republicans almost as Dickensian characters, greedy Scrooges hoarding their shillings while the poor suffered, and called their budget plan ``an attack on working-class Americans.''
To dramatize the point for television viewers, they held up scores of photographs of voters who they said would be devastated by the daunting changes - in Medicare, Medicaid, education assistance, for example - implicit in the Republican proposal.
Republicans, noting that Democratic leaders had no budget-balancing plan of their own to offer, mocked their critics as ``bereft of ideas'' and accused them of fighting the proposal with scare tactics. ILLUSTRATION: Graphics
HOW THEY VOTED
A ``yes'' vote is a vote to pass the resolution calling for a
balanced budget by the year 2002.
Herbert Bateman, R-Va. Yes
Owen B. Pickett, D-Va. No
Robert C. Scott, D-Va. No
Norman Sisisky, D-Va. No
Eva Clayton, D-N.C. No
Walter Jones Jr., R-N.C. Yes
HIGHLIGHTS OF THE PLANS
Highlights of the Republican plan for balancing the budget that
the House approved Thursday, and a comparison with the GOP proposal
the Senate debated. Unless otherwise specified, dollar amounts are
for seven years:
Deficit reduction: Both claim to gradually force this year's
expected $175 billion budget deficit into a small surplus by 2002.
House Republicans say their plan contains $1.4 trillion in savings,
Senate Republicans claim $961 billion. The House plan has extra
savings to pay for a tax cut.
Taxes: House plan promises $350 billion in tax cuts already
approved by the House, mostly tax credits for children, reduction in
capital gains tax rates, breaks for many businesses. Also increases
taxes for many Americans.
Senate plan does not now include tax cuts. But it would allow
about $170 billion worth of them to be approved when Congress and
the president are certified as having enacted a plan to balance the
budget.
Social Security: Neither chamber directly reduces benefits. But
because of the change in inflation calculations, annual increases
would be reduced.
Medicare: House would spend $176 billion next year, $232 billion
in 2002. Senate would spend $170 billion next year, $257 billion in
2002. More money would be spent under both, but not enough to keep
pace with rising medical costs and growing numbers of older
Americans. House savings would be more than $280 billion, Senate
savings $256 billion.
Medicaid and other health: House would spend $122 billion next
year, $149 billion in 2002. Senate would spend $121 billion next
year, $150 billion in 2002. House would save $187 billion from
Medicaid, Senate $175 billion. Both would let states decide how to
save the money.
Defense: House would spend $265 billion next year, $279 billion
in 2002, increases President Clinton's request by $68 billion and
ending decline in procurement. Senate would spend $262 billion next
year, $270 billion in 2002, same as Clinton and helping training
accounts.
Welfare and other income support: House spends $225 billion next
year, $279 billion in 2002, $101 billion savings from welfare.
Senate would spend $226 billion next year, $292 billion in 2002,
including $80 billion in savings by turning welfare into block
grants and letting states decide how to structure the program.
by CNB