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Clinton budget proposal under fire

By Martin Crutsinger Associated Press Published: February 3, 1998 12:00 AM

WASHINGTON _ To hear Republicans tell it, President Clinton is trying to have it both ways _ Mr. Balance-the-Budget and Mr. Tax-and-Spend-Liberal.

The president presented Congress with a 1999 spending plan that promises the first budget surplus in 30 years _ long a cherished goal of both parties _ but the GOP lost no time dismissing the document as a political booby-trap.

In their eyes, it is chock full of voter-friendly programs _ expanding child care, making more people eligible for Medicare and hiring new teachers. But the goodies, Republicans charge, would come at the expense of higher taxes and a greatly expanded federal government.

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Clinton and various members of his Cabinet were taking to the road today to highlight different budget initiatives while two of his top economic advisers _ Treasury Secretary Robert Rubin and Budget Director Franklin Raines _ were beginning the sales pitch on Capitol Hill.

Judging from the initial reaction from the Republican-controlled Congress, the administration has a tough job ahead.

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"The era of big government is back," said the House Budget Committee chairman, Rep. John Kasich, R-Ohio. "I am astounded that he would propose $150 billion in new programs."

"There's never been a brighter line of distinction between Republican and Democratic priorities," said House Speaker Newt Gingrich, R-Ga. "This is a budget only a liberal could love."

The Senate Budget Committee chairman, Sen. Pete Domenici, R-N.M., said there was no question that Congress would rewrite the president's proposal.

"If the president of the United States can increase spending and have tax credits worth $150 billion, why can't Republicans have a significant tax cut in lieu of all the spending?" Domenici asked.

He promised that any Republican budget would provide relief from the "marriage penalty," which requires many two-earner couples to pay more than if they were single.

But for its part, the administration expressed confidence that its programs would prove politically popular, especially Clinton's call to set aside any surplus revenues until the future of Social Security is ensured.

Clinton told an East Room audience Monday when he unveiled his new proposal that it would balance the budget three years earlier than the 2002 deadline set in last year's balanced-budget agreement and then produce surpluses "as far as the eye can see."

Clinton's spending plan projects a surplus of $9.5 billion in the fiscal year that begins next Oct. 1, a feat that has not been accomplished for 30 years, and it projects surpluses of $1.1 trillion over the next decade.

Not only can the federal government finally produce a budget surplus, but with the help of a booming economy, Clinton proposed new federal programs to help hire 100,000 new teachers, modernize 5,000 schools, lower the eligibility age for Medicare, increase medical research and greatly expand the federal government's role in child care.

"It is obvious that you can have a smaller government, but a more progressive one that gives you a stronger America," Clinton said.

While highlighting the bottom-line surplus figures, Clinton's budget did not spell out the precise totals for all the new spending envisioned or how all the savings would be achieved.

In fact, the biggest chunk of new revenue _ $65.5 billion over five years _ depends on Congress enacting a tobacco settlement, a prospect that even Democrats concede is growing less likely.

If the tobacco settlement doesn't come about, Raines said, the administration will either look for other offsets to pay for its new initiatives or scale them back.

Among the other savings, the administration will seek a cut of $17 billion by limiting benefits paid to veterans who claim disabilities due to smoking, and billions more from reducing fraud in Medicare, changing the student loan program, and cutting administrative costs for food stamps and Medicaid.

In addition to the $65.5 billion in new tobacco revenue _ equivalent to a $1.10 per pack increase in cigarette prices _ the administration would also boost taxes by $23 billion on insurance companies, multinational corporations and certain investors. Many of those tax increases were proposed and rejected by Congress last year.

The budget seeks $24.2 billion in tax cuts, primarily by offering expanded tax credits to low- and middle-income families to pay for child care and new tax incentives to promote energy conservation.

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