Congress presses budget ceilings; Lawmakers criticize Balanced Budget Act, try to save programs; 'There's no surplus'


WASHINGTON -- Congress is beginning to get a close look at the price of keeping the federal budget in balance -- it would mean squeezing everybody's favorite programs -- and signs are that the lawmakers won't pay it.

As for the much-heralded budget surplus: Forget about it.

Would-be budget-cutters are unnerved by dire scenarios: Scientific research canceled. Homeless AIDS patients left on the streets. Poor children turned away from Head Start programs. Emergency heating aid to the elderly denied. The space program ground to a halt.

Wailing from the House floor last week about these and other potential consequences of complying with the ever-tightening spending ceilings came from Republicans and Democrats alike. It left little doubt that Congress will break those ceilings.

"The balance we had to strike was very, very fragile, very, very difficult," said Rep. James T. Walsh, a New York Republican who crafted a spending measure that gave a little extra for veterans' health care but slashed millions from housing, space and science programs. "We are literally borrowing from Peter to pay Paul here."

Walsh won House passage of his measure by promising to fight for more money than the ceilings would allow in budget negotiations with the Senate and the White House.

"Had we had more money," he said, "I would have done things differently."

Republican congressional leaders have gone through elaborate contortions to try to stretch the budget ceilings.

A $14 billion surplus that the Congressional Budget Office projected in July for next year has already been allocated to various spending programs. And then some. As House spending bills now stand, the Congressional Budget Office reports that the bills would produce a deficit of $13 billion.

And yet House leaders have so little left in the pot to spend that they would have to cut $16 billion from the largest of the 13 spending bills -- the one that pays for programs run by the vast departments of Health and Human Services, Education and Labor.

If those cuts were applied across the board, all programs in those departments would have to be cut by about one-third, said Rep. David R. Obey of Wisconsin, the senior Democrat on the House Appropriations Committee.

"If we put a bill on the floor like that, no one would vote for it," said Elizabeth Morra, a spokeswoman for the House Appropriations Committee.

Dedicated penny-pinchers say the dark warnings of Draconian cuts have been exaggerated by lawmakers hooked on the political high of delivering popular programs to constituents.

"Washington is addicted to spending," said Rep. Tom Coburn, an Oklahoma Republican who has led the fight to stay within the budget limits. "That's one justification for cutting taxes -- to get the money away from here. There's no surplus, and we're not even paying down the debt."

'A false promise'

But Obey says the Balanced Budget Act of 1997, which created the spending caps, was a fraud from the start because it assumed that Congress would make deep cuts in federal programs.

"It was a false promise, based on a false premise," he said.

The 1997 budget deal was the result of 2 1/2 years of stormy negotiations between President Clinton and the Republican-led Congress. Its goal was to erase the budget deficit by 2002 through spending curbs that would begin slowly and escalate sharply after the first couple of years.

The deficit was wiped out by last fall, thanks to an unexpected rush of federal tax revenue produced by a booming economy. The main contribution of the spending curbs was probably the signal they sent to the financial markets that the government was determined to end its spendthrift ways.

As Clinton and Congress began to contemplate life after deficits, the first issue that arose was how to treat the surplus in the Social Security trust fund.

For decades, the money has been used to pay for other government programs. But Clinton challenged Congress in January to put most of the Social Security trust fund off-limits. Republican leaders upped the ante, vowing to put the entire amount off-limits.

As a result, estimates of federal revenue over the next 10 years are divided into two categories of surplus: About two-thirds, or about $2 trillion, would come from Social Security taxes and go into the Social Security trust fund. The remaining third, about $1 trillion, would come from all other sources of revenue and would be considered available for other government programs.

Next year's installment of that $1 trillion is the $14 billion surplus that has been promised.

Breaking the ceilings

But Obey and other lawmakers argue that the notion of a surplus in general fund revenue is based on the faulty premise that Congress will adhere to the rigid spending ceilings put in place by the 1997 budget act.

"Virtually every member understands in his heart of hearts or her heart of hearts that the 1997 Balanced Budget Act was based on inaccurate information," Rep. Barney Frank, a Massachusetts Democrat, said in urging colleagues to break the budget ceilings. "As I get older, I learn one of the few pleasures that improves with age is saying, 'I told you so.' I knew it was dumb then."

Rep. Steny H. Hoyer of Southern Maryland, a Democrat who voted for the Balanced Budget Act in 1997, said he believed "it was useful to the economy to get rid of the deficit."

But now that the deficit is gone, Hoyer contends, it is no longer necessary to try to meet the spending ceilings.

Hoyer, whose district includes the Goddard Space Flight Center in Greenbelt, is vigorously fighting the House measure's nearly $1 billion proposed cut to the space program. Regardless of how the money within the spending ceilings is allocated, he said, "the pot is too small."

The president's price

It appears likely that Congress will decide to break the spending ceilings. In fact, they were broken last year, when Clinton extracted an extra $21 billion from Congress as his price for signing the spending bills.

Much of the debate is expected to focus on whether the extra spending -- for programs or tax cuts sought by Republicans -- will be drawn from the Social Security surplus.

With none of the general revenue surplus left, it won't be easy for Congress and the president to avoid using Social Security money.

Clinton is soon to send to Congress a further spending request for a variety of purposes, including financing the Wye peace agreement for the Middle East and emergency aid for East Coast farmers hurt by the drought. The request could run at least several billion dollars.

"Once you agree on the first $1 billion, the next $25 billion is easy," said Rep. Thomas M. Davis III, a Northern Virginia Republican. Davis opposed cuts in spending for the space program but said he voted for the bill with the assumption that the money would be restored.

Lonely calls for restraint

The lonely voices on Capitol Hill are those clamoring for fiscal restraint for its own sake.

"It is difficult to gauge where one is going to reduce spending for veterans or space programs, science programs and others; I understand that," said Rep. Randy "Duke" Cunningham, a California Republican. "But I think it is more difficult, if we do nothing, for our children and our grandchildren."

Pub Date: 9/13/99

Copyright © 2021, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad