- The Washington Times - Monday, January 24, 2000

Congress is filled with plans for the newly cash-lush government, but little may actually get done on the tax and budget fronts this year. There are opportunities for action, but the hurdles are many and time is limited.
Some say doing nothing could be the best thing; no tax cuts and no new government programs will only mean a bigger bite out of the nation's $3.7 trillion public debt.
But others say if there is no agreement on the details, there is at least broad agreement on what issues ought to be addressed such as education, family tax relief and national defense. They say the conventional wisdom that election years are a legislative morass is overstated.
"The bottom line is it's too early to say," said Sen. Judd Gregg, New Hampshire Republican.
Mr. Gregg, a member of the Senate's Budget Committee, says that Congress will not dip into Social Security, but that the spending limits set in 1997 will be revised.
According to the committee, federal spending on all programs but entitlements such as Social Security and Medicare would have to fall from the $570 billion enacted for 2000 to $542 billion for 2001 to stick to the 1997 agreement.
Under the same scenario, sticking to that spending cap would leave the government with a $60 billion surplus after subtracting the Social Security surplus. The Social Security surplus is the excess revenue generated by payroll taxes, intended to fill the federal retirement program's trust fund.
But all sides agree the spending cuts needed to meet the caps are unrealistic. So the president has said he'll propose revising them in his new budget, and most Republicans say they'll back a more reasonable regime.
Both sides plan to leave the Social Security surplus untouched.
The question is how much to spend beyond that. If spending were frozen at the fiscal 2000 level, Congress and the White House would have $20 billion to use for tax cuts, new programs and debt reduction, according to the Senate Budget Committee. Allowing federal spending to grow with inflation would cut that surplus to $10 billion.
Mr. Gregg and other Republicans say there will not be any substantial growth in federal spending.
"We have already seen the president propose innumerable programs, and [so] the president has already made himself irrelevant to the process," Mr. Gregg said.
But Democrats are predicting success for their agenda.
"We have found that we've been very effective in getting things done at the table late in the process," White House spokesman Joe Lockhart said at a recent briefing. Talking specifically about a plan to spend federal money on local school construction, Mr. Lockart said "we're determined to get this problem addressed any way we can, and if the Republican majority wants to block it, we're going to find innovative ways to unblock it."
On the tax front, everyone agrees that Congress will not pass any sweeping tax-cut bill, but there is disagreement over whether smaller plans might get signed into law.
House Republicans intend to pass several tax-cut bills early in the session. They would provide marriage tax relief, expanding education IRAs and giving tax breaks for businesses that invest in low-income areas.
Some lobbyists and Republican aides say senators will back the bills to avoid being the first person "to vote against marriage penalty relief," but most predict the bills stand no chance in the Senate, where they easily could be filibustered or amended to death.
Several corporate tax lobbyists said they expect to be "playing defense" all year. Blocking efforts to close so-called loopholes, with no real vehicle to get tax relief.
One Democratic tax aide jokingly told a group of lobbyists recently their only hope was to convince Congress that corporate mergers ought to qualify for marriage tax relief, too.
Trent Duffy, spokesman for the House Ways and Means Committee, said there is every reason to think there will be a tax-cut bill this year.
"Vice President Gore is stuck at 40 percent [in the presidential polls] and he desperately needs to take the tax issue away from Republicans," Mr. Duffy said.

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