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Domenici Proposes $1.7 Trillion ‘99 Budget

Senate Budget Committee Chairman Pete Domenici is proposing a $1.7 trillion budget that would cut taxes by $30 billion through 2003 and make it hard for advocates of even deeper tax cuts to use any tobacco settlement to pay for them.

The New Mexico Republican’s 1999 budget package, which he planned to present to his committee Tuesday, signaled battles ahead with both President Clinton and some in his own party. Clinton wants tobacco money to be used for health research, child care, hiring new teachers and other initiatives, while GOP conservatives prefer a five-year tax cut at least twice the size of Domenici’s.

Aides to Domenici said he believes he has enough votes for his committee to approve his budget, probably later this week.

The congressional budget is a non-binding blueprint that sets overall tax and spending guidelines but leaves fights over details for later.

Domenici’s plan envisions $146 billion in budget surpluses over the next five years, said an aide who spoke on condition of anonymity. That would be $46 billion more than the nonpartisan Congressional Budget Office says would be produced by the spending plan Clinton sent Congress last month.

Domenici’s surpluses would be $9 billion in fiscal 1999, which begins on Oct. 1; $2 billion in 2000; $14 billion in 2001; $67 billion in 2002 and $54 billion in 2003. Clinton’s plan also claimed surpluses for the next few years.

As Clinton proposed in his State of the Union address in January, Domenici would use surpluses to reduce the accumulated $5.4 trillion national debt - a plan both men say would strengthen Social Security by bolstering the economy.

Clinton’s call to use the surplus for Social Security has had a strong political appeal that many Republicans - including Domenici - are reluctant to oppose.

But when it comes to the money the government may receive over the next five years in tobacco revenue, Domenici would use it to bolster the Medicare health-insurance program for the elderly and disabled. Medicare is another politically popular program that, like Social Security, faces a funding crunch when baby boomers begin retiring in a decade.

“Our budget is going to be called the Balanced Budget, Medicare and Social Security Preservation Act,” Domenici said.