Clinton Adapts Budget To Fit Gop Agenda President’s Proposal Focuses On Cutting Taxes, Bureaucracy

President Clinton’s struggle to adapt to the new Republican-driven politics of 1995 is evident in every line of the $1.6 trillion budget he sent to Congress on Monday.

Two years ago, Clinton’s first budget focused on cutting federal deficits. His second, last year, concentrated on reforming health care.

But this new fiscal 1996 budget - written after the Republicans’ historic conquest of Congress last November - gives short shrift to both of those earlier concerns and substitutes the GOP’s most popular themes.

Tax cuts are the centerpiece of Clinton’s new budget - just as they were for Republicans last fall - but Clinton targets his for middle-class voters.

Chopping the federal bureaucracy is his budget’s secondary theme: Clinton proposes killing 131 minor programs and consolidating 271 others in 27 “performance partnerships” with state and local governments.

Nevertheless, total federal spending still would rise - up $73 billion in fiscal 1996 alone, more than enough to keep pace with inflation.

Even Clinton’s signature call to increase federal “investment” in favored programs has taken a Republican turn.

In the past he emphasized spending hikes on such programs as education and training. Those are still there, but this year they are eclipsed by Clinton’s GOP-style crusade to boost spending to fight crime (up $3.4 billion), drugs (up $1.3 billion), illegal immigration (up $1 billion), and defense (up $25 billion over six years).

The resulting federal budget deficit would rise slightly, to $196.7 billion in fiscal 1996, which begins Oct. 1, 1995. Deficits are projected to persist over the next several years, and total federal debt would grow from $4.96 trillion this year to $6.71 trillion in fiscal 2000.

Meanwhile, health-care reform would simply be left to another day. Clinton’s budget defers the question; his aides vaguely invited Republicans to work together on it.

Clinton termed his budget “not a beginning, but a continuation” of the same policies he has pursued since he ran for president in 1992.

“We’re creating a leaner, not a meaner government, one which offers more opportunity to those who are taking responsibility for themselves, their families and their communities,” the president said, voicing his favorite new political themes, which he hopes will carry him to reelection in 1996.

Republicans said Clinton’s budget was not good enough.

“While the president has taken some positive steps … he has shown no interest in doing the heavy lifting needed to eliminate our budget deficits,” said House Budget Committee Chairman John Kasich, R-Ohio. “This budget lacks courage.”

Senate Budget Committee Chairman Pete Domenici, R-N.M., said Clinton’s budget “raises the white flag of surrender at the red ink of government spending. … The president took a walk.”

And Senate Majority Leader Robert Dole, R-Kan., said Clinton’s budget “leaves the deficit alive and well. He has given up on ever getting us to a balanced budget. And this should help our cause now in getting enough votes for a balanced-budget amendment.”

Anticipating such criticism, Clinton challenged Republicans “to do what we have done - to provide the taxpayers with specific and real details about the proposals they make. … Americans deserve to know. … “

Republican lawmakers say they want to balance the federal budget by fiscal 2002, but have not yet spelled out how they intend to do it.

Alice Rivlin, the administration’s budget director, termed Clinton’s budget “the start of a dialogue with the Congress and with the public. … It will definitely not be dead on arrival.”

Rivlin conceded that “we’re all disappointed that the deficit isn’t going down faster,” but argued that Clinton’s policies since 1993 have brought a once-soaring deficit under control.

Clinton’s proposed tax cuts would cost the Treasury an estimated $63 billion in forgone revenue over five years; he proposed offsetting spending cuts totaling $144 billion, leaving $81 billion to go toward cutting deficits below what they would be under current law.

Clinton’s tax cuts, first proposed in December, would:

Give a $500 tax credit for each child under 13 to families with adjusted gross incomes up to $60,000, and lower credits for incomes up to $75,000;

Grant tax deductions up to $10,000 for post-high school education expenses to families with incomes up to $100,000, and partial deductions for incomes up to $120,000;

Expand penalty-free withdrawals of money from Individual Retirement Accounts for educational, housing, or medical needs of families with incomes up to $80,000.

The 131 programs Clinton proposes to kill include the Interstate Commerce Commission, the Bureau of Mines’ helium reserve and the Agriculture Department’s campaign to eradicate cattle ticks.

But killing all 131 programs would save taxpayers only $2 billion in fiscal 1996 - about 12 cents out of every $100 in federal spending.

Most of the 271 programs Clinton wants to consolidate into 27 “performance partnerships” with states and localities were announced over the past two months. They include major reorganizations of the Departments of Housing and Urban Development; Transportation; Labor; Education, and Health and Human Services.

2. Where funds come from, where they go