House Panel Backs Budget Deal Part Of The 2002 Balancing Act Is $115 Billion In Medicare Cuts

The House Budget Committee on Friday voted 31 to 7 to approve the White House-GOP balanced-budget and tax-cut plan with only minor changes, as congressional leaders confidently prepared to rush the fiscal blueprint through Congress next week.

Rep. John C. Spratt Jr., D-S.C., and 10 other Democrats joined the Republican majority to embrace the compromise.

Swept up in the euphoria of the moment, House Budget Committee Chairman John R. Kasich, R-Ohio, even praised Clinton and the Democrats’ political courage in pushing through the president’s 1993 deficit-reduction and tax-increase package, a plan Kasich once predicted would shove the economy into the gutter.

The meticulously crafted budget compromise would wipe out the deficit by the year 2002 and impose substantial entitlement savings and reforms, including $115 billion of Medicare cuts.

It also would provide $85 billion of net tax credits over five years, including a $500-per-child family tax credit, reduction in the capital gains and estate taxes and roughly $35 billion of educational tax credits and deductions advocated by Clinton.

The Senate Budget Committee will meet Monday to ratify the budget agreement, with the House and Senate scheduled to vote the following day. While leaders forecast relatively smooth sailing, House Transportation and Infrastructure Committee Chairman Bud Shuster, R-Pa., will lead a floor fight to add $13 billion for highway spending over five years to the $124 billion provided in the budget deal.

Any differences between the House and Senate versions of the plan would be ironed out in conference before Congress gives final approval late next week.

While congressional leaders and White House aides boasted that the plan will impose tough spending strictures on the government in the coming decade, the path to a balanced budget has been greatly eased by a robust economy. And far from prescribing strong fiscal medicine, the budget plan is packed with $32 billion of new spending initiatives demanded by Clinton.

That extra spending - which is certain to mute much of the potential liberal Democratic resistance - includes expanded health care coverage for 5 million low-income children, restoration of welfare benefits for many elderly or disabled legal immigrants, and subsidized Medicare premiums for low-income seniors.

Moreover, Republicans have agreed to protect many of the administration’s domestic priorities, such as increased spending for Head Start, Pell grants for college students, child literacy, national parks, and Job Corps and other employment services.