December 11, 1995 in Nation/World

New Economic Forecast May Ease Budget Impasse Figures Will Give Budget-Crafters ‘A Few Extra Dollars,’ Kasich Says

David Willman Los Angeles Times
 

With another deadline approaching in the partisan battle over the federal budget, a leading congressional Republican indicated Sunday that a new, more optimistic forecast of the nation’s economy will bring the two sides closer to agreement.

“The economy’s gotten a little bit better,” said House Budget Committee Chairman John R. Kasich, R-Ohio. “We’ll have a few extra dollars to spend.”

Appearing on the CBS-TV program “Face the Nation,” Kasich suggested that the new view of the economy will be reflected when the revised forecasting of the Congressional Budget Office is made public this week.

Kasich did not identify how much extra money might be available or where it might be placed but said: “We’ll be able to make some improvements in the (spending) plan that we currently have.”

The congressional Republicans’ standing proposal aims to balance the federal budget in seven years through spending restraints of $900 billion. Their largest reductions - $270 billion - would come from reining in the growth in Medicare. President Clinton has proposed balancing the budget by trimming $465 billion over seven years.

The CBO’s forecast, and the assumptions that underlie it, have been a matter of intense dispute between the congressional Republicans and the president. On Friday, a temporary spending agreement expires. If the two sides do not agree on at least another short-term spending plan, it could force a repeat of last month’s shutdown of some government operations.

The president has frustrated the Republicans by breaking his earlier pledges to rely on the data produced by the CBO. In practice, Clinton has done what Democrats criticized Republican presidents George Bush and Ronald Reagan for: using the prognostications of the administration’s own Office of Management and Budget. The economic assumptions of the OMB were generally more optimistic than the CBO’s.

Speaking for the administration, Vice President Al Gore said Sunday that Clinton has chosen not to rely on the CBO because the predictions of the OMB are more reliable.


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