Social Security surplus tempts budget bargainers; Trickery predicted despite White House, congressional vows


WASHINGTON -- Congressional and White House negotiators are finding it so hard to keep their pledge to craft a budget that does not borrow from the Social Security surplus that they are widely expected to resort to trickery.

The Republicans who control Congress refuse to raise taxes. And neither the Republicans nor the Democrats have shown the will to make deep spending cuts. That leaves just one option: accounting gimmicks that would mask the use of excess Social Security revenue.

"Of course there will be gimmicks across the board -- accounting practices perfected over the years by the Democrats," predicted Rep. Tom Coburn, an Oklahoma Republican who is fighting mostly in vain for more spending cuts. "That's the best we can get from a body of career politicians."

If President Clinton and Republican congressional leaders make good on the promise they made Tuesday to agree on a plan for financing the federal government without using surplus Social Security money, it will be a feat not accomplished in decades.

"It would be a landmark achievement," said Robert Bixby, executive director of the Concord Coalition, which campaigned for years to eliminate the federal budget deficit that finally disappeared last year.

"Just the fact that they set this as a benchmark is very significant," Bixby said. "Two years ago, when they passed the Balanced Budget Act, they weren't even talking about not using the Social Security surplus. But if it's all done with gimmicks, the victory would be hollow."

Borrowing a portion of the Social Security trust fund has no effect on beneficiaries so long as the fund has a surplus. (One of nearly $150 billion is projected this year.) Nor does it have any direct effect on the program's ability to pay for the eventual retirements of the huge generation of baby boomers.

Political trap

But now that Republicans and Democrats have chosen to forsake such borrowing as a testament to their fiscal discipline and their support for the popular Social Security program, it would be politically difficult for either side to concede failure.

"I think at the end of the day, both sides will hold hands and swear they didn't touch a drop of the Social Security surplus, when the numbers show they they did," said Robert Greenstein, director of the liberal Center on Budget and Policy Priorities.

Such skepticism is rampant.

As budget talks between White House and congressional negotiators sputter along behind the scenes, Republicans finished work yesterday on two more of the 13 spending bills that finance most of the government. One bill remains, the huge measure that pays for the departments of Labor, Education and Health and Human Resources.

By their count, the Republicans are $4.5 billion short of what they need to pay for the final bill. The Congressional Budget Office has estimated that they might be as much as $13 billion short and that they must make deeper cuts if they want to avoid spending the Social Security revenue they have vowed to preserve.

'Defies fiscal physics'

Republican leaders plan to try to make up the shortfall with an across-the-board cut in nearly all federal programs except Social Security and Medicare. But many in their own ranks -- notably Sen. Ted Stevens, an Alaska Republican who is chairman of the Senate Appropriations Committee -- argue that this idea is irresponsible and could backfire politically because it would cut into many popular programs.

"They are trying to pour a gallon's worth of gasoline into a three-quart jar without spilling a drop; it defies fiscal physics," observed Robert D. Reischauer, a former director of the CBO. "There's no way to do it without some kind of budget alchemy. If you're not going to cut spending or raise taxes, the only other option is to cheat."

House Majority Leader Dick Armey prefers the phrase "innovative cash management." The government, Armey notes, has been criticized in the past for failing to manage its cash flow efficiently. As a result, he says, Republicans have decided to make sure money is not made available until it needs to be spent, a tactic that will put off billions of dollars in spending until next year's budget.

'Won't budge on this pledge'

As the budget process moves into its endgame -- a temporary measure to finance the government runs out a week from today -- the public jockeying has become largely political theater aimed at next year's elections.

Republicans are holding daily news conferences to take credit for ending the longtime "raid" on Social Security.

"Republicans have drawn a line in the sand," House Republican Whip Tom DeLay said yesterday at a news conference with representatives of senior citizen groups.

"The budget must be balanced, but we will not raid Social Security, and we will not raise taxes. No matter what, we won't budge on this pledge."

Keeping up the pressure

Though Clinton also committed himself this week to leaving the Social Security fund intact, DeLay says he remains suspicious. The Republican whip is the architect of a $1 million television ad campaign now under way that accuses Clinton and the Democrats of plotting to "raid" Social Security.

The ads, being run in about a half-dozen targeted Democratic districts, exhort viewers to tell their representatives to vote against the "raid."

Rep. Thomas M. Davis III of Virginia, chairman of the National Republican Congressional Committee, which is sponsoring the ads, said the purpose is keep the pressure on the Democrats.

"We don't have a deal yet," Davis said.

'Kind of ironic'

Democratic lawmakers say they are furious at DeLay's campaign.

"It's kind of ironic that they have picked this issue to try to demagogue on," said House Democratic Leader Richard A. Gephardt. "This is the party that fought the creation of Social Security and Medicare."

Senate Democratic Leader Tom Daschle attributed the Republicans' tactics to their frustration at being caught in a trap of their own making: their vow to put Social Security money off limits, even though their own members won't agree to cut spending deeply enough to do without it.

"They're in the box, they can't get out, and they know it," Daschle said. "They can't put us in that box. Our fingerprints have been off this budget from the beginning because we've been locked out of the process.

'Bipartisan nutty idea'

But now that Clinton has joined Republicans in swearing off the use of the Social Security surplus, the betting is that at the end of process, both sides will have no choice but to agree to a deal that relies heavily on creative accounting.

"Not using the Social Security surplus is a nutty idea," said Sen. John B. Breaux, a Louisiana Democrat. "But now it's a bipartisan nutty idea."

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