The chairman of the Senate Budget Committee on Tuesday proposed a Republican fiscal blueprint for next year that rejects nearly all of President Clinton’s calls for increased domestic spending but provides smaller tax cuts than sought by many Republicans.
The proposal from Sen. Pete Domenici of New Mexico is the first detailed Republican budget plan this year and appeared likely to be adopted more or less intact this week by the committee over Democratic opposition.
If approved by the full Senate, it would serve as the chamber’s broad tax-and-spending template as it confronts the first federal budget surpluses in a generation and begins grappling with the long-term financial crises facing Social Security and Medicare.
The plan calls for federal spending of $1.73 trillion, an increase of 3.6 percent over this year, but turns aside the White House’s proposals for new education, child-care and health-care initiatives.
It provides for tax cuts worth $30 billion over five years, about half what the GOP’s more ardent tax cutters have been demanding.
However, the plan goes along with the administration’s insistence that any budget surpluses be set aside until the nation agrees on a way to shore up Social Security, which will run short of money in coming decades as the enormous Baby Boom generation retires.
White House officials said Domenici’s plan attacked the core of their plan to help families by improving public schools and providing more assistance for day-care expenses.
“This budget squeezes out education and squeezes out children,” said Gene Sperling, the White House’s economic policy adviser.
One of the Domenici proposal’s main features is earmarking any proceeds from a legislated settlement with the tobacco industry over the illnesses caused by smoking to help Medicare, the health insurance program for the elderly.
Although there is no assurance that Congress and the industry will come to terms on a deal, Clinton’s budget proposal allocated $65 billion in anticipated proceeds from any settlement largely to his new spending plans, including $21 billion in new funding for child care over five years and $7.3 billion to reduce class sizes.
Domenici said that since 14 percent of Medicare’s expenditures go to treat smoking-related illnesses, about $30 billion a year, any tobacco settlement proceeds should go to averting the financial problems that Medicare will face as the population ages.
“That’s the program that’s most justified in having that money,” Domenici said in releasing his plan at a Budget Committee hearing.
Domenici also took issue with the White House in his approach to paying for the lone piece of major legislation passed by the Senate this year, a $214 billion highway-construction and mass-transit bill.
The bill exceeds by $23.5 billion the spending limits set by last year’s bipartisan balanced-budget agreement.
Domenici said the increased spending should be covered by spending cuts that Clinton had proposed in order to help finance his social programs. The proposed cuts include curtailed health benefits for veterans who have smoking-related illnesses unconnected to their service in the armed forces and administrative cost reductions in the Medicaid program of health insurance for the poor.
With mid-term congressional elections coming in November, members of each party said they look forward to the ideological debate over their differences, with Democrats happy to run as supporters of the social programs backed by Clinton and Republicans arguing in favor of a less expensive, less powerful federal government.
The differences between the parties are likely to be even more pointed in the budget proposal that House Republicans plan to introduce late next month. The House Republicans might call for deeper tax and spending cuts than Domenici’s plan.
