Gop Budget Plan Could Force Big Tax Hikes In Nw But Republicans Say Treasury Department Estimates Are A Scare Tactic ‘As Phony As A $3 Bill’

Republican plans to balance the budget could cost the Pacific Northwest billions of dollars in federal aid and force double-digit increases in state taxes in Oregon and Washington to cover the losses, the Treasury Department says.

But Northwest Republicans disputed the estimates on Friday, saying they were a political ploy aimed at eroding support for a balanced budget amendment to the Constitution.

“They are as phony as a $3 bill,” said Rep. Wes Cooley, R-Ore.

“This is just part of a political campaign,” said Sen. Slade Gorton, R-Wash.

A constitutional amendment requiring a balanced budget, combined with tax cuts in the GOP’s “Contract With America,” would reduce annual federal grants to Washington state by $6.7 billion and to Oregon by $3.6 billion, the department said in a report Thursday.

Fully covering those losses, from Medicaid and welfare payments to highway funds, education and environment, would force Washington state to raise state taxes by 11.5 percent, the department said.

Democratic leaders embraced the es timates as evidence of problems awaiting state governments under the GOP proposals.

“These numbers prove that the Republicans can’t balance the federal budget on a wish and a prayer. The programs they’re putting on the GOP guillotine aren’t about waste in government - they’re about real people,” said House Minority Leader Richard Gephardt, D-Mo.

“We’ve got to have an honest balanced budget debate - and a real balanced budget plan from the GOP so every American knows exactly what’s at stake in this debate,” he said.

Sen. Patty Murray, D-Wash., said the numbers for Washington state don’t surprise her.

“People need to know that if we expect a good quality of life, it costs something,” Murray said Friday.

Federal lawmakers have a responsibility to set spending priorities, not rely on a mandate to balance the budget, she said.

“These numbers the Treasury Department put out are very real. These are real people - your next-door neighbor, your mother who is on Medicare,” she said. “Washington state is heavily dependent on federal spending. We will have a huge impact if the ‘Contract With America’ is approved.”

Gorton said Friday the estimate “says more about the administration than it says about the Balanced Budget Amendment.

“It says loud and clear that this administration has no plans to balance the budget ever and that it simply wants an excuse for maintaining the status quo,” he said.

“We have a government that is too big and is involved in too many aspects of our lives. Our answer is to cut back on the size of government,” Gorton said.

Cooley said the numbers were premature.

“In order to describe cuts that are going to be necessary and taxes that are going to be necessary, you have to have a budget plan, which we don’t have yet,” Cooley said.

“This is just a worst-scenario guess, the purpose of which is to derail the Balanced Budget Amendment. It is just a blatant scare tactic in its lowest form.”

The Treasury Department said a sig nificant portion of the cut in both Northwest states would come in the form of health care assistance to the elderly. Oregon would lose an estimated $1.1 billion annually in Medicare benefits and Washington state $1.5 billion.

Washington would lose a combined $3.4 billion in housing assistance, student loans, veterans’ benefits and grants to local governments.