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Clinton's budget plan to seek $1.766 trillion; Funds to be sought for domestic programs, Republican favorites


WASHINGTON -- President Clinton will release a $1.766 trillion federal budget blueprint for 2000 today that proposes billions of dollars in new spending while preaching fiscal conservatism.

Clinton's budget plan will ask Congress for substantial new money for scores of domestic programs popular with liberal and middle-class constituencies, from urban housing vouchers to new classroom construction.

But Clinton, taking advantage of surging federal tax receipts, will also propose large spending increases for cherished Republican priorities: the military, local police and small business.

The president's plan envisions a budget surplus of at least $76 billion for the current fiscal year and much larger surpluses stretching as far into the future as government forecasters can see.

The health of the U.S. economy and overflowing federal coffers allow Clinton the luxury of indulging in large new "investments" in politically popular labor, education, health care and environmental projects while cloaking himself in fiscal prudence by proposing to use budget surpluses to pay down the federal debt.

But the prospects for Clinton's ambitious programs are uncertain given Republican majorities in both houses of Congress and the ill will on both sides as a result of the impeachment battle.

Clinton's proposal for increased defense spending is likely to win Republican support and may be increased. His plan to provide tax credits for long-term medical care also has bipartisan support. But many of the other spending programs are unlikely to win Republican backing at a time when limits on federal spending imposed as a result of the Balanced Budget Agreement of 1997 remain in effect.

While Clinton proposes to increase overall government spending by $39 billion over this year's level, federal outlays as a proportion of the U.S. economy will be at the lowest level since 1973, 19.4 percent.

The plan raises, but does not definitively answer, the overriding economic question now before the Congress and the White House -- how to adjust to a time of surplus after a generation of seemingly intractable federal budget deficits.

The plan, all of which is subject to congressional approval, is in effect a holding action until a long-term plan is negotiated to shore up Social Security and Medicare, the crown jewels of Democratic progressivism that are projected to run out of money early in the next century.

"This year's budget is truly a historic document," Jack Lew, director of the White House Office of Management and Budget, said. "The transition from an era of deficits to an era of surpluses has changed so many of the issues and poses basic, fundamental choices. What do you do in a time of fiscal well-being to ensure that you'll have fiscal well-being far into the future?"

Clinton has announced a plan to ensure the solvency of Social Security and Medicare well into the next century by reserving 77 percent of any budget surpluses to shore up the universal retirement and health-care entitlements. An additional 12 percent of the projected surpluses would be set aside for a new form of retirement account designed to increase the nation's paltry personal savings rate.

Pub Date: 2/01/99

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