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Clinton not ready to cut programs

THE BALTIMORE SUN

WASHINGTON -- Tomorrow, a president whose first impulse in solving a national problem is often to create a new entitlement program will participate in a conference on . . . how to reign in the cost of government entitlement programs.

It's been dubbed the Entitlement Summit -- a conference to scrutinize mandatory government spending programs, such as food stamps and health care for the poor and elderly, that are driving up the nation's $4.4 trillion debt. But already, President Clinton's aides are cautioning against expecting much from it.

The reason is simple: The Clinton administration doesn't want to control spending just yet on two of the largest entitlement programs, Medicare and Medicaid, because it wants a new, bigger entitlement of its own -- health insurance for every American -- and it needs to squeeze money from those health care programs to finance it without a huge tax increase.

"It seems to us to be a little crazy to potentially undermine our health care reforms through an all-out attack on entitlements," said Roy Neel, the deputy White House chief of staff. "The president signaled his willingness to look at everything next year, but he doesn't want to rush headlong into a premature commitment to [cut] Medicare and Medicaid until we have completed health care reform."

The risk to the president, however, is that he will continue to appear to be behind the curve on the public's and Congress' well-documented desire for federal budget cutting.

"The administration may get away with putting off cuts under the guise of doing health care reform first," said Rep. Timothy J. Penny, a Minnesota Democrat who fought with the administration all year for deeper budget cuts.

"But I think it's going to catch up with them sooner or later. The president has been on the wrong side of the spending debate about six times this year. And he can't continue to avoid real deficit reduction without the public concluding that he's not serious about it."

Last spring, the budget bill that passed Congress contained a plan to reduce the projected federal deficits by $500 billion during the next five years.

But because Mr. Clinton's package contained new spending and tax increases, because most of the cuts don't come until the end of the five years and because the national debt will still grow by an estimated $1 trillion during Mr. Clinton's term, the deal met fierce resistance on Capitol Hill.

It passed by only one vote, even after Congress included further cuts, phased out some of the tax increases -- and the president promised to look at further cuts this autumn.

That's what tomorrow's conference at Bryn Mawr College in Pennsylvania is about. But despite the presence of all the usual players -- the budget director, Leon E. Panetta; his deputy, Alice M. Rivlin; Health and Human Services Secretary Donna E. Shalala; and Social Security Commissioner Shirley Chater -- the White House has been quietly counseling against expectations of real action.

Yes, the president will be there, but that's only because of a promise he made to the event's official hostess, Rep. Marjorie Margolies-Mezvinsky, the suburban Philadelphia Democrat who jeopardized her own seat in Congress by casting the deciding vote for the budget bill.

"I wouldn't put too much stock in that particular event," Mr. Neel said.

"Our commitment was to go there and participate in an open and frank discussion of these issues. No more, no less."

The Concord Coalition, a bipartisan group devoted to reducing the government's deficits, found out just how much less this week when Ms. Margolies-Mezvinsky informed the group this week that it couldn't bring its "deficit clock" to the conference. That clock records the amount by which the national debt is growing -- $12,000 a second, or nearly $1 billion a day.

"She said, 'The administration doesn't want it there,' " said Fred Bucher, a spokesman for the Concord Coalition. "But that clock would show what we're up against."

One key reason why the deficit is so out of control is that each year an increasing portion of the federal budget is off-limits to Congress unless it actually changes the law.

Defense spending has decreased, and so-called "discretionary" spending has held the line, but the programs that have continued to grow are the entitlement programs.

The big three are Social Security, Medicare and Medicaid, which together account for $530 billion of the overall $770 billion spent on entitlements. They also include a vast array of other expensive programs, ranging from food stamps and Aid to Families with Dependent Children to farm-price supports and military benefits.

They grow because their budgets do not require congressional action: Any American who qualifies gets the service or check, and because the U.S. Treasury doesn't have the money to cover the runaway costs of these programs, the national debt keeps mounting.

Some critics are challenging the very concept of such oversight-free programs. But the instincts of the president and his top advisers run in a different direction.

In the past year, the Clintonites have called for "full funding" of Head Start, which would make preschool an entitlement program for impoverished children. They also called for making childhood immunization an entitlement -- until an outcry by conservatives forced them to back away from the proposal. And their health care reform proposals would make health insurance the biggest entitlement since the creation of Social Security.

"Make no mistake about it," wrote David Shulman, an economist with Solomon Brothers Inc. in New York. "President Clinton is proposing an entitlement program, and if its substance survives, it will inevitably expand."

History proves his point.

In 1965, government accountants estimated that Medicare, a new program to pay hospital insurance for the elderly, would grow from a $1 billion program to $9 billion by 1990. It grew all right -- but to a $67 billion program.

Likewise, in 1972, when the food stamps program was still in its experimental stage, the government spent just under $2 billion on it. Today, it is a $27 billion entitlement. Even adjusted for inflation, its costs have increased more than 400 percent.

Nevertheless, these programs were popular, and for years, they were politically untouchable. In the past year, however, driven by Ross Perot and the 1992 presidential election campaign, a consensus is growing in Congress and among the electorate that these once-sacred cows must be capped, cut or somehow brought under control.

Last month, Representative Penny and Republican Rep. John R. Kasich of Ohio proposed cutting $90 billion over five years -- half of it in entitlement spending. Even with the administration lobbying furiously behind the scenes, it nearly passed, failing on a House vote of 219 to 213.

Mr. Clinton prevailed by arguing behind the scenes to lawmakers the same thing he's expected to argue tomorrow: Health care reform first, then deficit reduction.

A lot of people are unconvinced.

"They seem more interested in reallocating government spending, not cutting it," said Susan Tanaka, vice president of the Committee for a Responsible Federal Budget. "It seems to us that if you're in favor of deficit reduction, you do deficit reduction."

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