Budget deal keeps its balance Compromise: Though it will have every opportunity to collapse, the balanced budget agreement is likely to succeed in containing the volatile forces of both parties.


WASHINGTON -- President Clinton and the Republican leaders of Congress barely had time two weeks ago to toast the end of their long political war over the budget before the squabbling resumed.

They had announced, with much self-congratulation, their agreement on a plan to balance the federal budget by 2002. But the fizz in the celebratory champagne seemed to outlast the accord. Republican leaders contended that they made no guarantees about certain pet proposals of Clinton's; the White House insisted that there had been firm commitments. Negotiators kept haggling until late last night to produce a written agreement that the House Budget Committee could use today to begin formal approval of the deal.

For the rest of spring, then into summer and probably fall, debates over budget and tax issues will supply many of the headlines from Washington. Should negotiations break down, the president could veto one or more of the Republicans' spending bills -- raising the prospect that parts of the government could shut down -- just as they did in late 1995 and early 1996.

How can this happen if the White House and Congress actually have a deal? Karen Hosler of The Sun explains.

Was the budget deal unraveling?

No. But the accord seems to have been announced prematurely. Reached just before Clinton left on a foreign trip, it was a handshake agreement that left the various participants with conflicting understandings of what had been decided. Since then, negotiators have sought to spell out, on paper, the terms of the deal.

Meanwhile, other lawmakers who were not part of the negotiating process are trying to secure changes.

Now that a written accord is in place, is that the end of the process?

It's just the beginning.

The budget deal is a broad outline that lays out the plan by which the president and Congress intend to balance the budget. It sets target figures for producing about $220 billion in savings over five years from social and military programs, and from curbing the growth of automatic spending programs, such as Medicare. The agreement also calls for $135 billion in tax cuts, partly offset by $50 billion in additional levies.

But most of the details still have to be worked out.

What happens next?

Congress is scheduled to vote before Memorial Day on a resolution that reflects the deal between Clinton and the Republican leaders. This, too, is simply a blueprint that lays out very few details.The budget resolution is a nonbinding document that merely sets the framework for future legislation. It does not require the president's signature.

How do the details get worked out?

Slowly, painfully, tediously. The House Ways and Means Committee and the Senate Finance Committee are beginning work on two bills to translate much of the budget agreement into law. The first bill deals with squeezing savings out of Medicare, Medicaid and other automatic spending programs. The second deals exclusively with tax cuts.

Republican leaders would like to see both bills passed and on the president's desk by July 4th. But Congress is unlikely to complete the work before the August recess.

The House and Senate appropriations committees will also draft 13 separate bills. These bills include line-by-line spending amounts for every program in the federal government: military, foreign and domestic. Those bills must be passed and signed into law by the president if the country is to avoid a government shutdown.

Since there's a budget deal, haven't the broadest issues been resolved?

Yes, but the remaining decisions involve billions of dollars, nearly all segments of the economy and almost every taxpayer. So there is plenty left to fight about.

The fiercest battles likely will be waged over tax legislation. Many of Washington's lobbyists will be fighting to make sure their clients benefit from the $135 billion in total tax cuts; others will try to ensure that their clients' tax breaks are not among the $50 billion in "loopholes" that must be closed.

A fight is also shaping up between hospitals and other Medicare providers that have been tapped to bear most of the $115-billion cut in the health program for the elderly. Disagreement also remains over the shaping of the 13 bills that finance federal departments and agencies.

Why would President Clinton veto these bills?

A veto is unlikely if the Republicans stick to the tenor of what the White House says they agreed to. But the president might assert the need to veto a tax cut that ignores his priorities for education credits and deductions, or one that seems too generous to the rich at the expense of low-income workers.

Clinton might also object to Republican efforts to influence federal policy through the appropriations bills on such issues as abortion, environmental regulation, or the elimination of agencies such as the National Endowment for the Arts.

What are the prospects for another government shutdown?

The Republicans say they were so burned by the shutdowns in their last budget battle with Clinton -- because voters mostly blamed the Republicans -- that they won't let it happen again.

In fact, Republican leaders are pushing legislation now that would continue government operations in the fall even if some spending bills have not been approved by then.

Are there opponents of the budget deal who could conceivably kill the legislation?

Some liberal Democrats and conservative Republicans will probably resist the agreement -- notably those with presidential ambitions, such as Rep. Richard A. Gephardt, the House Democratic leader, and Sen. Phil Gramm, the Texas Republican.

But Clinton and the Republican leaders are motivated to beat back the deal's sharpest opponents. Clinton is fighting for his legacy, and the Republican leaders want to maintain and strengthen their hold on Congress.

So, at the end of the year when the bills are all passed, can we be certain that the result will be a balanced budget?

No. Too much is left to luck and wishful thinking.

The accord is based on optimistic projections about economic growth that may prove unrealistic, thus reducing federal revenue. Plus, the budget deal imposes such tight restraints on spending for government programs that by the fourth and fifth year of the deal Congress may find it politically impossible to stick to the limits.

Most troubling, critics say, the agreement simply ignores the biggest long-term budget problems, such as how Medicare, Medicaid and Social Security will have to be restructured to accommodate the costs associated with baby boomers as they reach retirement age.

Even so, Clinton and the Republican leaders maintain that their budget deal is a big step in the right direction. Assuming that it holds.

Pub Date: 5/16/97

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