- The Washington Times - Friday, March 31, 2000

The Senate Budget Committee approved Thursday a $1.8 trillion budget blueprint for 2001 and beyond.

The plan would use surpluses generated by Social Security taxes, about $1.1 trillion over the next five years, to pay off federal debt held by the public.

Of the surplus generated by general revenues, $150 billion would go to tax cuts.

"You can be proud of this budget," said Senate Budget Committee Chairman Pete V. Domenici, New Mexican Republican. "It protects Social Security unequivocally, protects Medicare, and significantly reduces the national debt."

But the tax cuts are considerably less than what the House earlier approved.

"I don't want this to be the incredible shrinking tax cut," said House Budget Committee Chairman John R. Kasich, Ohio Republican. The plan he shepherded through the House proposed $200 billion in cuts over five years.

In fact, of the differences between the bills, the tax cut is of greatest concern, Mr. Kasich said.

Republicans on the Senate Budget Committee, as did those in the House, used a parliamentary maneuver to avoid an embarrassing vote on the tax-cut plan offered by presidential hopeful Texas Gov. George W. Bush. It is not clear exactly when Mr. Bush's tax plan would take effect, but it appears certain the plan would not fit in the budget laid out by congressional Republicans.

Another major difference between the House and Senate versions of the budget is language setting aside $40 billion for a Medicare prescription-drug benefit.

The House version of the bill makes release of those funds contingent upon an overall reform of the financially strapped program. But an amendment offered by Sens. Olympia J. Snowe, Maine Republican; Ron Wyden, Oregon Democrat; and Gordon H. Smith, Oregon Republican, would allow $20 billion to fund the drug benefit without any other reforms.

Republican sources say Mr. Domenici and others opposed the $40 billion set aside, arguing not to increase the costs of a program already set to go broke by 2015.

Sen. Phil Gramm, Texas Republican, said Thursday night, "I will not support [a prescription-drug benefit] without reform and I assume [the amendment] will be fixed" in a House-Senate conference on the budget resolution.

"All in all, it has been a challenge," Mr. Domenici said of getting a budget plan on which Republicans on the committee could agree. "But when the chips were down, you saw we were pretty unified."

Earlier this month, Mr. Gramm said nondefense discretionary spending would increase under the plan faster "than at any time since the Carter administration."

Spending on all discretionary programs, which excludes entitlements such as Social Security, Medicare and interest on the debt, would grow from $570 billion in 2000 to $597 billion in 2001. The plan also retroactively adds $5 billion to programs for fiscal 2000.

Mr. Gramm and other fiscal conservatives negotiated a series of parliamentary mechanisms to enforce the budget and restrictions on the gimmicks used to hide the budget's true costs, but the proposed spending levels were not reduced.

Democrats say spending grew by 5 percent last year and the Republican plan unrealistically assumes spending will grow just 1.8 percent from 2000 to 2001 and by an annual average of 2 percent through 2005.

"We all know it won't work," said Sen. Kent Conrad, North Dakota Democrat.

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