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Jewish World Review Oct. 18, 2000 / 19 Tishrei 5760

Morton Kondracke

Kondracke
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Consumer Reports


While Bush, Gore debate
surplus, Congress spends it


http://www.jewishworldreview.com -- WHILE THE PRESIDENTIAL candidates are debating how to carve up the anticipated budget surplus, Congress and President Clinton are busy spending it - to the point where some experts wonder whether there'll be a surplus.

The Concord Coalition, for instance, warns that if discretionary spending keeps growing at the same rate it has over the past three years, the 10-year non-Social Security surplus won't be $2.2 trillion, as expected, but $700 billion.

"That's a good sum of money," said the Coalition's executive director, Bob Bixby, "but it's far less than the cost of the presidential candidates' promises."

Vice President Al Gore proposes spending increases and tax cuts - mainly spending increases - that his campaign totals up at $1.4 trillion. Texas Gov. George W. Bush (R) proposes programs worth $1.9 trillion - mainly in the form of tax cuts.

In each case, though, there's a dispute whether the estimates are accurate. Gore puts the cost of his "Retirement Savings Plus" entitlement at $200 billion, but Republicans say it could be $750 billion. Democrats accuse Bush of underestimating his tax cuts by $300 billion.

Disputes aside, the fact is the Congressional Budget Office's estimate of the 10-year on-budget surplus was based on the idea that discretionary spending would grow at the rate of inflation, or 3 percent per year.

Instead, according to Bixby, it's been growing at 5.5 percent - a rate that would chew up $1.4 trillion of the CBO's estimated $2.2 trillion.

CBO calls for discretionary spending to decline as a percentage of the gross domestic product from 6.2 percent in the current fiscal year to 5.2 percent by 2010. At current rates of spending, Bixby figures, it will grow to 6.8 percent.

Of course, these pessimistic calculations may be offset by new and rosier CBO projections based on continued strong growth in the economy.

CBO based its surplus projections on a 10-year economic growth average of 2.7 percent. If that is raised to 3 or 3.3 percent, it could add $500 billion to $1 trillion to the new estimate posted in January, leaving more room for spending and/or tax cuts.

However, as Democrats on the House Budget Committee note, Congress isn't only increasing discretionary spending but mandatory spending, as well.

Whereas CBO projected fiscal 2001 outlays at $638 billion, and the Republican budget resolution promised to hold spending down to $612 billion, actual outlays are headed for the neighborhood of $650 billion or $660 billion.

On top of that, the Democrats observe, Congress is on its way to enacting tax cuts and mandatory spending increases that could total nearly $300 billion over 10 years, which would further reduce the surplus.

The mandatory items passed or likely to pass include $62 billion in health care improvements for military retirees, $50 billion in Medicare "givebacks" for health providers, $55 billion for a telephone excise tax repeal, $15 billion for railroad retirement benefits, $20 billion for community-renewal incentives, $20 billion for business tax cuts and $80 billion in lost interest savings.

A Medicare prescription drug benefit probably won't pass this year, but when it does, the likely cost will be around $350 billion over 10 years.

So, who's responsible for all this spending? Naturally, massive finger-pointing is under way, though it's hard to argue with the proposition that Congressional Republicans have failed to hold the line as they promised.

Rep. John Spratt (D-S.C.), the ranking member of the House Budget Committee, asserts that all of the first five appropriations conference reports approved this year have exceeded President Clinton's requests by $11 billion.

Republicans on the House Appropriations Committee say the Democratic numbers are wrong, but don't deny spending has exceeded Clinton's requests.

Partly, they say, that's because Clinton has raised the ante in late-session negotiations, partly because the GOP has made policy decisions to increase defense, wildfire control and transportation, and partly because Clinton purposely underfunded certain programs when he submitted his budget.

On the plus side, Republicans and Democrats have agreed not to spend current Social Security and Medicare tax surpluses - reducing the national debt by $150 billion to $200 billion a year, lowering interest rates and helping the economy grow.

On the minus side, though, they've done nothing to reform these programs so they can survive the retirement of the baby boom generation.

And as Bixby and former CBO chief Bob Reischauer of the Urban Institute point out, Members are on their way to spending and obligating most or all of the non-Social Security surplus before they're sure it will materialize.

"Today's politicians," Reischauer observed, "shouldn't dissipate all the country's fiscal flexibility for the next decade." That applies both to presidential candidates and Congress.



JWR contributor Morton Kondracke is executive editor of Roll Call, the newspaper of Capitol Hill. Send your comments to him by clicking here.

Up

10/16/00: Two debates leave lots of questions
10/03/00: What questions should be debated?
09/28/00: Gore and Bush should prepare to lead
09/19/00: Bush let values issue slip away
08/25/00: Gore hands center to Bush
08/22/00: AlGore, look to future, not to Bubba
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06/22/00: Congress Is Near Flunking a Test On School Reform
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06/13/00: On Stem Cells, Bush Has Wrong Pro-Life Stance
06/08/00: Has Gore Caught Bush?
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05/23/00: The secret to winning the election: Economic programs
05/18/00: Gore should regroup
05/16/00: McCain's Support Is Tepid, But Lets Bush Focus on Gore
05/11/00: Voters need wonk training
05/09/00: Bush Could Score With Charge That Gore's Too Partisan
04/28/00: Reno's force aids Clinton, not Elian
04/25/00: Should Clinton be indicted?
04/24/00: Can Gore win on Bush tax cuts?
04/18/00: Levin's 'bridge' key to China trade?
04/11/00: Congress, U.S. Voters Still Aren't Ready For Campaign Reform
04/06/00: Bush, Gore Silent As Popular Culture Gets Ever Coarser
03/30/00: Is 2000 Like 1948, 1976 or 1960? Or Is This Unparalleled?
03/28/00: Will Bush, Gore Go for a Better Way To Pick Nominees?
03/23/00: Medicare cutbacks bleed hospitals
03/20/00: Chances Improve That China Trade Will Pass Congress
03/16/00: Lieberman as veep would help Gore
03/14/00: Can Bush, McCain Unite to Beat Gore?
03/09/00: Can GOP Forge Unity After Nasty McCain-Bush Race?
03/07/00: What accounts for McCain's excesses?
03/02/00: 'Debate' Proved Gore Is This Year's Best Gut-Fighter
02/29/00: Surprises! The 2000 GOP race is full of it
02/25/00: Voters want centrist in White House
02/23/00: Gore would hit McCain's record
02/15/00: Will negativity hurt McCain in S.C.?
02/10/00: How hard should Bush hit McCain?
02/08/00: Bush must retool his entire campaign
01/27/00: Could Gore beat Bush as Truman beat Dewey?
01/20/00: Big New Surplus Estimates Could Alter 2000 Politics
12/21/99: Bush improves, everyone panders
12/16/99: Prospects improve for campaign reform
12/14/99: Riots raise free trade as 2000 issue
12/10/99: Gore won GOP 'debate' in N.H.
12/07/99: Election pits Bush cuts vs. Medicare boost
12/03/99: Can race be a constructive issue in 2000?
11/19/99: White House race may be best in decades
11/16/99: Where is Bush on health care fight?
11/11/99: Will TV stop profiteering from politics?
11/09/99: Is GOP isolationist, or just partisan?
11/04/99: Gore, Bradley Run Opposite Races On Style, Substance
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10/27/99: Bush to fight 'culture wars' -- positively
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10/19/99: Gore scores among party big shots, but polls go South
10/14/99: Bush critiques could help GOP Congress
10/12/99: Congress can save health care from ruin
10/07/99: Will gun-control cause the GOP to shoot itself in the foot?
10/05/99: Gore moves: Desperate but necessary
10/01/99: Fox, Armstrong make case for NIH
09/28/99: Dems' race brightens Bush's chances
09/23/99: East Timor deflates `Clinton Doctrine'
09/21/99: Buchanan v. Bush? Yeah right
09/17/99: Candidates turn attention to poverty
09/15/99: Bush's education problem
09/09/99: Budget makes 2000 an `issues' election
09/07/99:Airport rage increases, with good reason
09/02/99: U.S. future up for grabs in 2000
08/31/99: U.S. Capitol needs visitor's center -- soon
08/24/99: Will 2000 be the year of the foreign crisis?
08/19/99: Neither party has upper hand for '99
08/17/99: Ford gets freedom medal one month early
08/12/99: There's time to catch Bush, say Gore aides
08/10/99: Rudy, Hillary try much-needed makeovers
08/09/99: GOP must launch new probe of Chinagate
08/02/99: Pols blow fiscal smoke on budget surplus
08/02/99: One campaign reform should pass: disclosure
07/27/99: Gore leads Bush in policy proposals

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