- The Washington Times - Wednesday, February 7, 2001

Sen. Hillary Rodham Clinton, who missed most of the Senate Budget Committee's first meeting on government spending and tax projections yesterday, joined other Democrats in urging a "go-slow" approach on President Bush's proposed tax-cut plan.

"We're dealing with a lot of uncertainty at this point, and part of my question is, well, what's the hurry?" the New York Democrat said of Mr. Bush's proposed 10-year, $1.6 trillion tax cut.

Mrs. Clinton arrived 90 minutes after the meeting convened, missing the testimony of U.S. Comptroller General David Walker, head of the General Accounting Office (GAO), along with most of the discussion by other panel members.

Mr. Walker painted a bleak long-term budget picture after baby boomers begin to retire in large numbers in 2011, placing great financial strain on entitlement programs such as Social Security and Medicare.

"Without a change in entitlement programs, demographics will overwhelm the surplus and drive us back into escalating deficits and debt," Mr. Walker said.

However, as the country faces huge budget surpluses resulting from unexpected tax revenues generated by a robust economy, the time is right for a tax cut, Mr. Walker said.

"Higher 10-year surplus projections provide room to address pent-up demands for some tax cuts and/ or additional spending kept in abeyance during years of fighting deficits. It is important to remember, however, that while projections for the next 10-year period look better, the long-term outlook looks worse," he said.

Without entitlement reform, Social Security, Medicare and Medicaid will consume three-fourths of all available federal revenues by 2030 and "little room would be left for other federal spending priorities such as national defense, education and law enforcement," Mr. Walker testified.

Democrats emphasized that Mr. Walker's long-term projections suggested that Mr. Bush should curtail his tax-cut agenda.

"Who let the dogs out?" said Sen. Kent Conrad of North Dakota, the committee's senior Democrat.

"The gates have been opened," he said, and "a tax cut threatens fiscal discipline."

Sen. Phil Gramm, Texas Republican, countered by saying, "No one has credibility on debt unless they can explain how we spent $561 billion in the last six months … It is clear to anybody that this is increasingly a debate between spending and tax cuts … Without a tax cut, we will pay off the debt in nine years. With a tax cut, we will pay it off in 11 years."

Sen. Pete V. Domenici, New Mexico Republican and committee chairman, said Republicans would like to pay off the debt "as quickly as possible," but added that a tax cut would stimulate economic productivity and pay for itself as baby boomers begin to retire.

Without a tax cut, he said, the government faces a $3.1 trillion surplus even after projected Medicare shortfalls are funded.

Sen. Robert C. Byrd, West Virginia Democrat, said President Reagan's "three tax cuts rolled into one" sounded good when he voted for the package in 1981.

"I've kicked myself in the rear many times since. It didn't work," he said.

"We need a conservative fiscal approach," said Sen. Bill Nelson, Florida Democrat. "If we have a tax cut that is so big, we are going to wreck our prosperity, we're going to wreck our economy."

Mrs. Clinton arrived at noon as Mr. Nelson was speaking and quickly read five pages of handwritten notes taken by her legislative aide, April Springfield, before she was recognized for questions.

"I start with the differences we seem to have on arithmetic," Mrs. Clinton said in response to Republican arguments. "You know, it's very difficult to get the numbers to add up, from what's being proposed in terms of additional obligations."

She said the GAO's baseline projections did not account for the imminent expiration of about 20 tax credits, which could be extended, along with the possible repeal of the alternative minimum tax.

"It strikes me as shortsighted for us not to take into account the long-term challenges … with respect to entitlement programs," Mrs. Clinton said. "But I think there are other investments that our country should be looking at … and long-term national needs that I think have to be addressed."

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