Bush's budget undercuts Democrats' maneuvering against GOP

WASHINGTON — WASHINGTON -- President Bush's budget has generated its share of criticism from Democrats, who contend that it overlooks pressing social needs and the reality of a deepening recession. But as a political document, the administration's $1.45 trillion spending plan for fiscal 1992 has drawn grudging respect from the opposition.

The president's budget, lawmakers in both parties say, nicely fits the GOP's needs in the impending contest for the presidency.


"It's clearly designed as a political challenge," said Representative Leon E. Panetta, D-Calif., chairman of the House Budget Committee. "It's very clever."

Democratic strategists are particularly struck by proposals in the budget that the White House says would shift spending from upper-income people to lower-income people. Though many of these initiatives -- involving agricultural, Medicare and other programs -- are given little chance of congressional approval, they appear designed to blunt an ongoing Democratic campaign to portray Republicans as mollycoddlers of the rich.


"The president is trying to make a point," said Sen. Pete V. Domenici of New Mexico, the senior Republican on the Senate Budget Committee. "Whether any of these will actually be adopted is another matter."

White House Budget Director Richard G. Darman conceded as much yesterday, suggesting to the Senate panel that many of the proposals were advanced largely to stimulate discussion -- for example, tripling the Medicare premium for doctors' coverage for those with incomes exceeding $125,000 and eliminating farm price-support payments for those whose non-farm incomes surpass the same amount.

"It's the issue of principle that we'd like to see joined and debated," Mr. Darman told the committee. "The politics of doing more on this have been difficult for all to deal with."

But in confronting that difficulty, the administration appears to have undercut a Democratic strategy in place since the administration began to push for a cut in the capital gains tax rate.

Last year, Democrats parried the White House thrust with claims that it would mostly benefit the rich. Republicans said the tax break would stimulate economic growth and benefit lower-income wage earners.

Nevertheless, Democrats pounded on the "fairness" issue throughout last year's grueling, marathon budget talks. The White House found itself on the defensive as Republican negotiators fought off soak-the-rich Democratic proposals that included an income surtax on millionaires.

"The 'fairness' issue could have been very potent for Democrats if we were going to be stupid about it," said House Republican Whip Newt Gingrich of Georgia.

Mr. Gingrich and other Republicans openly anticipated the president's budget with relish, aware that it would contain a number of elements designed to cast the GOP in a progressive light. The budget plan included, for example, a proposal to increase the number of higher-education grants available to poorer students and shrink aid available to students from better-off families.


"What we're basically doing is changing the mix," said Mr. Darman. "Don't take poor people and start them out in life with an enormous burden of debt. . . . Give people in the middle more of the debt [because] they have a better chance of repaying."

Likewise, the president proposed increasing funds for a number of programs aiding the poor -- albeit at the expense of other federal activities.

His spending plan suggested, for example, a $100 million increase for the Head Start school program for poor children, to $2.1 billion. Similarly, the president would add $487 million to child nutrition efforts, expanding that budget to nearly $6.1 billion, and set aside $2.1 billion to help public housing renters buy their dwellings.

But his budget would also slice $25.3 billion over five years from Medicare, which helps the elderly and handicapped pay medical bills. It would end the subsidy Amtrak uses to improve railroad equipment and tracks. And it would cut $48 million from programs to provide jobs for the low-income elderly.

Democrats said they will never sign on to many of the cuts. Moreover, they criticized many of the choices Mr. Bush made as he shuffled resources among domestic programs.

Nevertheless, few Democrats have volunteered the kind of cuts they would enact to pay for spending increases -- a trade-off that will have to be addressed in coming months.


Last year's sweeping budget agreement laid down spending caps and, for the first time, forbade lawmakers from shifting funds between defense programs, discretionary domestic programs such as Amtrak subsidies and mandatory spending programs such as Medicare. This year's budget fight will thus be one of priorities, as both parties grapple with the question of how scarce dollars should be spread among national needs.