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Clinton Offers Budget Plan Gop Appears More Responsive Than Democrats To President’s Balanced Budget Proposal

Wed., June 14, 1995

WASHINGTON President Clinton, stung by Republican criticism and scrambling to carve out a role in Congress’ budget deliberations, unveiled a spending plan Tuesday night that embraces the Republican goal of a balanced budget but achieves it three years further into the future.

In a hastily organized five-minute address to the nation, Clinton outlined a plan to cut growth in projected spending by $1.1 trillion over 10 years, slow the growth of spending on Medicare and Medicaid, trim social and farm programs, close a number of corporate tax loopholes and retain the package of middle class tax cuts he proposed in mid-December.

“It took decades to run up these deficits - it’s going to take a decade to wipe it out,” Clinton said. “It’s time to clean up this mess.” But he suggested that the plan would not “put the brakes on so fast that we risk our economic prosperity.”

With the hurriedly pieced-together presentation, Clinton also re-entered the health care reform effort to save $125 billion over seven years through a limited overhaul of the medical insurance system.

Saying he is not “slashing” health care for the elderly, the president called for cutting Medicare by $130 billion. The Senate would cut back Medicare growth by $255 billion; the House, by $288 billion.

Clinton also signaled that he would not accept Republican proposals for cuts in education and training, hikes in the cost of health care for senior citizens and reductions in veterans benefits.

In one of his most provocative challenges to House Republicans, he proposed to save $6 billion over the next 10 years by discontinuing corporate tax loopholes and subsidies. That is a move Republicans maintain is the equivalent of raising taxes - something they have vowed not to do. The White House did not single out specific loopholes or subsidies for elimination, pledging instead to work with Republicans to identify them.< The proposal, coming at the eleventh hour of a process that is nearing its conclusion on Capitol Hill was greeted by skepticism by some lawmakers in both parties.

But in the official Republican response, Senate Majority Leader Robert Dole of Kansas welcomed the president’s plan as evidence that the nation is on the way to balancing the budget.

“Tonight, nothing can stop us. This is truly a moment that we must seize,” said Dole, adding that “with the president’s entry into the process, a long-awaited national discussion finally begins in earnest.”

However, House Speaker Newt Gingrich, R-Ga., appeared to depart from the spirit of conciliation, which he began at a meeting last Sunday with Clinton at a picnic in Claremont, N.H.

“We’ve done all this work for months,” said Gingrich, speaking in Grand Rapids, Mich., charging that the president was trying to counter that work with “a five minute speech.”

“Well, then fine, it’s good public relations,” he said. “We’ll see tomorrow if they have any substance.”

Some of Clinton’s fellow Democrats were also skeptical. In a sharp rebuke, Rep. David Obey, D-Wisc., fired off a written statement saying that “if you don’t like the president’s position on a particular issue, you simply need to wait a few weeks.”

“If you can follow this White House on the budget, you are a whole lot smarter than I am,” Obey added.

“I’ve been jumping off a bridge every night for the administration, saying you shouldn’t cut Medicare to pay for tax cuts for the rich, said Rep. Pete Stark of California, ranking Democrat on the House Ways and Means health subcommittee. “When I jumped this morning, somebody forgot to tie my bungee rope to the bridge.”

Clinton’s budget efforts this year have, in fact, taken a torturous path. His official version released last February offered no pathway toward a balanced budget and appeared to surrender the work of fiscal discipline to the Republicans. His aides even suggested that balancing the budget would be harmful to the economy.

Then, last month in a casual comment during a radio interview, the president suggested he would produce a plan to balance the budget within 10 years. The White House promptly backed off that idea, before making the final decision Tuesday to switch it back into forward gear.

With both the House and Senate on the verge of completing action on the 1996 budget, Clinton feared being left on the sidelines, said his chief of staff Leon Panetta.

What finally spurred the president to act, said Panetta, was concern that the Republicans would wrap their spending and tax cuts together in a single, enormous package and attach it to the debt limit extension bill - all just before the new fiscal year begins Oct. 1.

Then, if the president were to veto the measure, the government would be shut down, at least temporarily, until the required legislation could be passed. It is that “train wreck,” that Clinton wanted to avoid, said Panetta.

Some leading Republicans said the president was already too late. The president is stepping in too late, and “we would have to junk the whole process and that is not going to happen,” said Sen. Phil Gramm, R-Texas, who is challenging Dole to be the Republican nominee in next year’s presidential race.

Added House Majority Leader Dick Armey, R-Texas: “He’s just seen a fast-moving train leaving town, and he’s managed to catch up fast enough to catch the caboose.”

xxxx Highlights of Clinton’s proposal

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