- The Washington Times - Wednesday, August 29, 2001

A Congressional Budget Office report predicting that the government will tap Social Security taxes to balance the budget reopened yesterday the battle between Republicans and Democrats over fiscal priorities.

Republicans say the CBO report underlines the need for fiscal discipline in the face of future threats from Democratic big spenders.

Democrats counter that the report proves that President Bush's tax cuts have squandered the surplus needed to fund his own priorities and to fund Social Security for baby boomers, starting a decade from now.

"I've listened to all of the hand-wringing that's going on on the part of the big spenders in Washington, saying, 'Oh, my gosh, the budget is tight; oh, my goodness, the surplus is gone,'" House Budget Committee Chairman Jim Nussle, Iowa Republican, told reporters yesterday.

"You're darn right it's gone, so stop your spending and let's let families and individuals spend that money instead of Washington," he said.

"It's time to put Washington on a diet," added House Majority Leader Dick Armey, Texas Republican.

House Speaker J. Dennis Hastert, Illinois Republican, said CBO's more pessimistic outlook "simply tells us that we will not be able to pay off as much debt as soon as we originally had wanted — nothing more, nothing less."

Senate Budget Committee Chairman Kent Conrad, North Dakota Democrat, responded that "the administration is in denial" about the impact of having to use Social Security taxes to balance the budget.

Mr. Conrad said Mr. Bush "is claiming there really isn't much of a problem, or that if there is any problem, it is just a short problem of a downturn. But that isn't what we face."

"It is far more serious than that," Mr. Conrad said, noting that Mr. Bush still wants to push an aggressive agenda, including further tax cuts and increased spending for defense.

Tax cuts and slower-than-expected economic growth in 2001 joined forces to cut the gross federal surplus for the next decade from the $5.6 trillion predicted in May to the $3.3 trillion that CBO now projects.

Without Social Security payroll taxes to bolster revenues, the surplus over the next decade will add up to just $847 billion.

In the near term, that means borrowing billions of dollars from Social Security to fund other government programs through 2004, CBO says.

The Office of Management and Budget paints a slightly less pessimistic picture, but the CBO said yesterday its assumptions about economic growth in 2001 still may be too optimistic.

If CBO projections are correct, the new proposals laid out by Mr. Bush last week would require spending more than $100 billion in Social Security taxes through 2006 rather than paying down more debt, Democrats said.

"Despite White House denials, the president's tax cut and spending requests, not new congressional spending, are driving the government back into the red," said Rep. John M. Spratt Jr., South Carolina Democrat.

"This is a weather report," Mr. Nussle said of the CBO forecast. "You've got to wait for the weather to happen.

"Should we react to the weather report? Yeah. … But the one thing we know that will ruin our picnic out here is if you don't control spending."

Over the years, Mr. Nussle and fellow Republicans have tried to curb spending by requiring Congress to use surpluses generated by Social Security and the Medicare hospital trust fund to pay off federal debt. Although Republicans are backing off that goal, they also are accusing the Democrats of crying crocodile tears.

"Well, it's not the law," Mr. Nussle said. "I mean, the Senate Democrats refused to bring that up for now three Congresses.

"Since 1968 until the Republicans took control in 1995, the Democrats spent not only every penny of the [hospital insurance] Medicare trust fund and every penny of the Social Security trust fund, but they ran us into almost $4 trillion worth of national debt," Mr. Nussle said. "And now they come running up, saying, 'We put all this on the credit card, but you've got to pay it off, and you've got to pay it off faster.'"


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