Clinton agrees to cut $55 billion from budget but is firm on stimulus


WASHINGTON -- With a critical victory on his budget plan all but wrapped up, President Clinton turned his attention yesterday to defending his short-term economic stimulus package from spending cutters who haven't had their fill.

"If anyone here . . . tells you that the economy is fine in America, tell them that where you live there's still a little work that needs to be done," Mr. Clinton told the legislative conference of the National League of Cities.

President Clinton spoke shortly before a meeting with House Budget Committee Democrats where he finalized a deal to trim $55 billion in his budget plans over five years, including at least $3.7 billion in the first year.

The cuts, which were negotiated last week by the White House and Democratic leaders in the House and Senate, are intended to make sure Mr. Clinton reaches his goal of reducing the budget deficit to below $200 billion by 1997, despite a congressional recalculation of his numbers.

The House and Senate budget committees are expected to approve similar versions of the plan tomorrow, with floor action scheduled next week.

Final congressional approval of these spending blueprints, which only specify spending caps in broad categories, is due before the lawmakers adjourn for the Easter break April 2.

Mr. Clinton agreed to the spending cuts, which will affect many of his new investment initiatives, because of pressure from moderate and conservative Democrats. They are particularly sensitive to the clamor for government belt-tightening at a time when the president is calling for higher taxes.

Many of the cuts were still to be determined, but the House panel planned to slash an additional $1 billion from defense spending in 1994 and slow the increases Mr. Clinton planned for education and job training. Science and space programs were also to be scaled back, along with highway and mass transit projects.

"There will be no disproportionate hits," said Rep. Barney Frank, D-Mass., who serves on the House Budget Committee. "A little of this, a little of that. No one thing was singled out for a significant whack," he said.

Programs for the poor were protected in the House version, Mr. Frank said. And dealing with entitlement programs, such as Medicare, has been postponed until the president's health care proposal is offered, he said.

The only opposition to the budget plans was expected to come from Republicans, who are vigorously protesting Mr. Clinton's plan for major tax increases.

Rep. John R. Kasich of Ohio, the ranking Republican on the House committee, was preparing an alternative that would cut the deficit by up to $430 billion over five years by making deeper domestic spending cuts, but without tax increases.

"We believe that higher taxes, more domestic spending and unreasonably high defense cuts are not the prescription needed to control spiraling federal deficits," Mr. Kasich said.

But many of these Democratic lawmakers were disappointed yesterday at their failure to make deeper cuts in Mr. Clinton's long-term budget plans, and they warned that their frustration will likely be aimed at the president's $12.6 billion package of speedy spending on public works projects, summer jobs and other programs to give the economy a quick boost.

Congress has already approved another part of the stimulus package -- a $3.4 billion extension of unemployment benefits.

"It's very hard to vote against the budget resolution because it looks like you are not supporting the president's program," said Rep. Timothy J. Penny, a Minnesota Democrat who has been leading a group of moderate budget-cutters. "But I think people will feel less of an obligation to help the president on the stimulus package. It's deficit spending from day one."

George Stephanopoulos, the White House spokesman, suggested yesterday that Mr. Clinton was willing to compromise with Congress on the stimulus much as he did on his budget proposal.

House leaders and administration officials have predicted that $2 billion or $3 billion in new spending might be pared from the stimulus package.

Mr. Clinton's short-term stimulus package totals $30 billion, divided about equally between new government spending and tax incentives.

Action on the $15 billion package of tax credits is not expected until later in the year.

The House Appropriations Committee is scheduled to vote today on the $12.6 billion public works portion of the package. Efforts to derail the package would come on the House floor or in the Senate.

Copyright © 2019, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad