Senate Unveils Radical Budget Plan Some Agencies Face Deep Cuts; Others Would Be Eliminated

Senate Republicans on Tuesday offered a politically daring and far-reaching plan to balance the budget by 2002 by substantially reducing spending for Medicare and Medicaid, slashing foreign aid, accepting a further decline in defense and ordering deep, potentially painful cuts in hundreds of other popular domestic programs.

The seven-year budget plan, unveiled by Senate Budget Committee Chairman Pete V. Domenici, R-N.M., would save nearly $1 trillion and eliminate the Commerce Department, the Interstate Commerce Commission and more than 100 other federal programs and agencies; phase out funding for Amtrak and other mass transit programs; halve the budgets of the National Endowment for the Arts and the National Endowment for the Humanities, and end President Clinton’s national service program.

Domenici’s plan is the first detailed attempt by either party to make the politically difficult choices necessary to achieve the first balanced budget since 1969, at the end of the Johnson administration.

Democrats denounced the plan, saying it would gut social safety net programs, provide for the rich at the expense of the poor and dilute health care benefits for the elderly.

“This is a retreat from what this country is about, on our values about the environment and caring for those who are poor and sick,” said Sen. Barbara Boxer, D-Calif.

Under the plan, which will likely reach the Senate floor early next week, Medicaid, the federal-state health insurance program for low income families, would be transformed into a block grant program turned over to the states to spend as they see fit and the rate of spending would gradually decline from 10 percent to 5 percent a year. A bipartisan commission would be established to advise Congress on how to avert the projected bankruptcy of the Medicare program.

In some areas, spending would increase. Spending for the FBI, the Drug Enforcement Administration, the Immigration and Naturalization Service and the Violent Crime Reduction Trust Fund would shoot up. Funding for programs like Head Start, special education, Pell grants and community service block grants would remain at current levels.

In one of its most surprising features, Domenici’s proposal would make no change in defense figures recommended by President Clinton. Republicans had talked about the need to reverse the steady decline in military expenditures over the past 10 years. But the GOP Senate plan would allow this year’s $270 billion defense budget to dip to $255 billion over the next three years, and then rise back to $270 billion by 2002.

House Budget Committee Chairman John R. Kasich, R-Ohio, is to present a similar plan today. The House plan includes a major tax cut that could drain the Treasury of more than $340 billion over seven years.