Clinton proposes budget plan

Clinton presents $1.7 trillion budget as first balanced-spending plan in 30 years

Los Angeles Times

WASHINGTON - With a bow to history, President Clinton unveiled yesterday the first balanced budget proposal in 30 years, sending Congress a $1.7 trillion federal spending plan that projects a decade's worth of budget surpluses.

Declaring an end to ''an era of exploding deficits," Clinton forecasted a $9.5 billion surplus for fiscal 1999, which begins Oct. 1, and steadily growing surpluses that would add up to $1.1 trillion 10 years from now.

As he did in his State of the Union address, the president warned Congress not to use up the projected surpluses - on tax cuts or massive new spending programs - until lawmakers can decide how to overhaul the financially troubled Social Security program.

The 1999 spending plan would bring the budget into the black three years ahead of the 2002 deadline envisioned in the budget accord worked out last May between the White House and GOP lawmakers.

AP PHOTO/Daily Vice President Al Gore applauds President Clinton during a ceremony yesterday where Clinton unveiled his 1999 federal budget proposal.

''This budget marks the end of an era, an end to decades of deficits that have shackled our economy, paralyzed our politics and held our people back," the president said during a White House ceremony. ''It can mark the beginning of a new era of opportunity" for the United States.

Franklin Raines, Clinton's budget director, told reporters that if Congress maintains ''fiscal discipline" this session, the budget may be balanced in this fiscal year, which ends Sept. 30. Current projections are for a $10 billion deficit for fiscal 1998.

Reaction to Clinton's budget from Congress was predictably partisan.

Republicans contended that, rather than maintaining fiscal discipline, the president's new budget violates the formal spending caps set by last year's budget agreement, and would launch the nation on a new spending spree.

''You can't expect a leopard to change its spots, and you can't expect President Clinton to embrace the concepts of a smaller and smarter federal government," Rep. Tom DeLay (R-Texas), the House majority whip, told reporters.

Democrats praised the president's spending plan, and accused Republicans of trying to tar a fiscally sound proposal.

''They can't claim that these proposals are fiscally irresponsible," said Rep. John Spratt, Jr. (D-S.C.).

Clinton's proposed initiatives and tax credits include programs aimed at reducing tobacco use, expanding child-care services, extending Medicare to some Americans aged 55 to 64 and broadening coverage to include uninsured children.

The spending plan also includes grants and tax incentives to help reduce class size in schools by recruiting 100,000 more teachers and building thousands of new classrooms; $17.9 billion in new lines of credit to increase the lending coffers of the International Monetary Fund, the 181-country organization that is leading the global bailout of financially troubled Asian economies.

The president's $252.6 billion proposed defense budget holds overall military spending near current levels for the next five years but would reduce personnel to pay for new weapons systems.

Clinton's plan would decrease the budgets for several federal agencies and programs, including the U.S. Army Corps of Engineers, recreational resources, farm price supports, the space program, the Nuclear Regulatory Commission, and highways and railroads.

Besides the proposed tax increases, Clinton is recommending about $24.2 billion in tax cuts for Americans, including $5.6 billion in expanded tax credits for child-care expenses and low-income working families; and tax credits to encourage the purchase of highly fuel-efficient cars and homes, as well as cleaner business machinery and equipment.

02-03-98