Republicans, who control Congress, immediately vowed to rework much of it. Staking out this year's political battlefield, they insisted that hundreds of billions of the $2.41 trillion in surpluses Clinton envisions over the next decade should be returned to Americans in tax-rate cuts, not used for new spending.
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| AP PHOTO President Clinton points to a chart yesterday in the East Room of the White House, where he spoke about his new budget proposal. |
"We don't want to invent programs to spend the surplus on," said Senate Budget Committee Chair Pete Domenici (R-N.M.)
Economists caution that a deep, protracted recession could erase the projected black ink, which began abruptly last year with a surplus of $69 billion.
But Clinton exulted that after three decades of unremitting deficits, the mountains of money give Washington "a special obligation" to address problems gnawing at the country. He would not only brace the government for the looming retirement of 76 million baby boomers, but reduce the $5.6 trillion national debt built over decades of federal borrowing - and spend money for scores of other purposes.
"We have a rare opportunity that comes along once in a blue moon to any group of Americans," Clinton said as he outlined his plan at the White House.
Clinton would spend $39 billion more, or 2 percent more, than is planned for fiscal year 1999, which runs through Sept. 30. But thanks to the humming economy, he anticipates $77 billion more in federal revenue, allowing this year's expected $79 billion surplus to swell to $117 billion in 2000.
If those numbers seem surreal, so did the juxtaposition of the day's two chief events: As the president was releasing his budget, lawyers from his Senate impeachment trial were in a Mayflower Hotel room blocks away, questioning Monica Lewinsky about her affair with Clinton.
The impeachment fallout could leave both sides eager to build records of legislative achievement, or it could make them eager to draw political distinctions as the 2000 elections approach. Initial signs pointed to confrontation.
Republicans agreed with Clinton that most of the surpluses should be set aside to trim the national debt and strengthen Social Security. But the two sides are already fighting over how to do that.
And while Republicans want to use most of the remaining surpluses - nearly $800 billion over 10 years - largely to cut income tax rates, Clinton prefers aiming that money at Medicare, new retirement investment accounts, and defense and domestic programs.
"In all my years in Congress, I've never seen such a kitchen-sink approach to government," mocked tax-cut advocate Rep. Bill Archer, (R-Texas), chair of the House Ways and Means Committee.
Treasury Secretary Robert Rubin shot back, saying that reducing the federal debt is "a far better use of the surplus than consuming it now with a tax cut."
Rather than broadly trimming tax rates, Clinton proposed $32.6 billion in narrowly targeted tax cuts over the next five years. They include a new $1,000 tax credit to help people afford long-term care for elderly or disabled relatives, and a credit of up to $500 for stay-at-home parents of babies under age 1.
But because budget rules require many spending increases to be paid for, Clinton would also raise taxes by $82 billion through 2004.
The biggest chunk - $34.5 billion - would come from boosting the current 24-cents-a-pack cigarette tax to 94 cents next year. That would include a new 55-cent increase, and accelerating an already approved boost that hasn't yet taken effect. Congress showed little taste for higher tobacco taxes last year.
Clinton's budget also assumes the federal government will pocket $18.9 billion through 2004 from legal settlements the 50 states have reached with the tobacco industry. But opposition in Congress and from states makes the fate of that proposal questionable as well.
Most of the rest of the tax increases would affect businesses and investor and have been rejected before by Congress.
Clinton would raise user fees on scores of federal activities by $25.8 billion over the next five years. The meat, poultry and egg industries would have to reimburse the government for inspections. And health-care providers would pay a new $1 fee for filing reimbursement claims on paper.
Overall, Clinton proposed at least $129 billion in new initiatives, both in new spending and tax cuts. He would:
-Gradually boost Pentagon spending, including giving military personnel their biggest pay boost in two decades, 4.4 percent, while increasing the money for antimissile defense and weapons purchases.
-Provide $1.4 billion, $200 million above 1999, to continue hiring more elementary school teachers.
-Expand tax credits for child care by $6.3 billion over five years.
-Give the National Institutes of Health a $320 million boost to its $15.6 billion budget, a 2 percent increase that congressional Republicans will likely increase.
02-02-99
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