Online NewsHour: The Budget

THE BUDGET

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In late April, more than six months into the fiscal year, and after thirteen temporary spending bills and two government shutdowns, Congress finally produced a 1996 budget acceptable to President Clinton. The bill provided for a seven-year balanced budget plan, and cut total 1996 spending by $23 billion. Both sides claimed victory in a fight over which programs would be cut and conflicting forecasts for economic growth.
The public's tangible distaste over the 1996 budget battle has forced House Republicans to moderate--somewhat--in their plans for the 1997 budget. Proposed cuts in emotional, "hot-button" programs, such as Medicare and Medicaid, have been scaled back, as well as cuts in domestic appropriations, which are instead frozen at the fiscal 1996 level. Also, the GOP reduced the $225 billion net tax cut first proposed in the 1995 budget--roundly criticized by Democrats as mainly benefiting the rich--to in $122 billion in 1997.
However, Republicans still have their sights set on Goals 2000, in which the president has called for a 1/3 increase but which opponents decry as an unnecessary--and expensive--federal intrusion into the states' educational responsibility. Fiscal 1997 begins October 1; with continuing resolutions, however, the current budget resolution will be little more than a Republican campaign platform until after the 1996 elections. With President Clinton ahead in the polls, Republicans are not anxious to replay what was a loud and politically damaging standoff.
While both sides still agree in principle on the seven-year schedule, skepticism understandably remains whether the collective political will of future Presidents and Members of Congress will be strong enough to hold to the plan, which spans terms and political climates, and requires considerable appropriations discipline into the next century. Some experts question whether any current Congress has the legal right to direct the spending of a future Congress.
Such concerns--and the attractiveness of it as a political banner--have kept alive the consideration of a constitutional amendment. The balanced-budget amendment would require the federal government to have a balanced budget by the year 2002, or two years after ratification by the states, whichever is later, and three-fifths majority vote by both the House and Senate to run a deficit. The amendment, H J Res 1, passed the House in early 1995, but was successfully stalled in the Senate. In March 1996, after a vigorous month-long debate, the bill was defeated by a vote of 65-35, just short of the 67 (or two-thirds majority) needed to pass a constitutional amendment. It was a telling example of the Senate Democrats' ability to hold ranks against Republicans.
Although a Senate revote in June failed, 64-35, proponents of the amendment are heartened by the closeness of the vote and express confidence that the amendment will succeed next year. Detractors, while not disputing the bill's intent, claim that in amendment form, the balanced budget proposal would overly threaten Social Security, weaken the doctrine of majority rule, and, should Congress and the president fail to adhere to its guidelines, hand budget power over to federal judges. The amendement should resurface in 1997, and its success or failure will turn largely on the partisan makeup of Congress.

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