- The Washington Times - Tuesday, February 8, 2000

President Clinton yesterday sent Congress his blueprint for a $1.84 trillion budget that would shower billions of dollars on new federal programs, cut taxes for poor and middle-income families while raising tobacco taxes, and eliminate the national debt by 2013.

"It's a balanced budget with a balanced approach to achieve our national priorities," said Mr. Clinton, who sent the plan to Congress by courier, but presented it in person to his staff at the Old Executive Office Building.

"It maintains fiscal discipline, pays down the debt, extends the life of Social Security and Medicare, and invests in our families and future," Mr. Clinton said.

Republicans criticized the plan the president's eighth budget as a lame-duck offering from a tax-and-spend liberal whom Americans would soon reject.

Under the proposal, Mr. Clinton would increase discretionary spending by $32 billion from 2000 to 2001, total spending by $46 billion.

And while he proposes $350 billion in targeted tax cuts over the next decade, he also proposes $180 billion in new revenues, about half of which would come from "eliminating unwarranted [tax] benefits" and another $65 billion of which would come from new taxes and penalties on tobacco and tobacco producers.

According to the president's own numbers, the net effect of tax cuts and revenue increases in 2001 will leave the government with $9 billion more than if there were no changes in policy.

House Majority Leader Dick Armey, Texas Republican, said no matter what the tax proposals were called they would not be enacted.

"Let me be very clear: This Congress will not raise taxes," Mr. Armey said. "The federal government already takes more from families than it needs, and wastes too much of what it spends."

Senate Budget Committee Chairman Pete V. Domenici, New Mexico Republican, said of the plan: "It will not be passed. It is intended to get Democrats elected."

Overall, Mr. Clinton proposes taking in $2.019 trillion to fund $1.835 trillion in spending and create a $184 billion surplus, $160 billion of which will be generated by the Social Security trust fund.

Rep. Charles W. Stenholm, Texas Democrat, said he was "extremely gratified" the president's budget took such an aggressive stance on debt reduction. "We can and should cut taxes, but any tax cut must be in the context of a fiscally responsible budget," he said.

Mr. Clinton repeats a plan offered a year ago, but refined in the summer, to "set aside" interest savings from debt reduction for Social Security, create a federal matching program for personal retirement accounts, and a new prescription-drug benefit for Medicare recipients that will cost an estimated $168 billion over the next decade.

House Speaker J. Dennis Hastert, Illinois Republican, called the budget a "paradox."

In a statement released by his office, Mr. Hastert said "since the State of the Union, we've heard about many of the president's new spending proposals, but we have yet to hear how these proposals can fit in with our longer-range goals of protecting the Social Security surplus, paying down the public debt, and addressing the issues of tax fairness like the marriage tax penalty."

Under Mr. Clinton's plan, the federal government will take in 20.1 percent of the gross domestic product (GDP) next year, but with the economy growing that would be down from a 45-year high of 20.4 percent reached last year.

At the same time, spending would fall to 18.3 percent of GDP, its lowest point since 1966.

Mr. Domenici said spending in the president's plan would consume 73 percent of $1.9 trillion in projected surpluses over the next decade.

Democrats and the White House say Republican criticism of the plan is based upon unrealistic assumptions about how much Congress will appropriate through 2010. More reasonable assumptions that spending on programs other than entitlements will grow at the rate of inflation as proposed in the president's budget would leave a surplus of about $883 billion over the next decade, they say.

In 2001 alone, spending would increase $32 billion.

House Budget Committee Chairman John R. Kasich, Ohio Republican, said the budget establishes "no priorities."

"It is all things for all people," he said.

Much of the president's proposal had been aired already, through targeted press conferences, well-placed leaks to the media, and Mr. Clinton's own State of the Union address.

It includes tax breaks for education, tax credits for low- to moderate-income working families, and breaks to keep middle-income families from becoming subject to the alternative minimum tax.

On the spending side, Mr. Clinton proposes more money for education, health, the environment and the military.

Noting that these are priorities shared by Republicans and Democrats, Rep. John M. Spratt Jr., South Carolina Democrat, said "this should be a budget on which both parties can build."

Mr. Clinton's $40.1 billion education initiative included a 12.6 percent increase over the last budget the largest increase in the history of the Education Department.

House Education and the Workforce Committee Chairman William F. Goodling, Pennsylvania Republican, called Mr. Clinton's budget "disappointing," particularly in its underfunding of increases for the Individuals With Disabilities Education Act.

Mr. Goodling called the president's student-loan initiatives "dead on arrival" and also decried Mr. Clinton's $5 million increase for developing national math and reading tests.

"The spike we used in the last Congress apparently did not go through the heart of a national test," Mr. Goodling said. "But we'll refine the target and make sure it stays dead this time."

Andrea Billups contributed to this report.

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