BUDGET RESOLUTIONS

	November 17, 1999
	Terence Smith joins our regional commentators for the budget story.

TERENCE SMITH: The White House and the Republican- controlled Congress are close to a final agreement on a $385 billion budget deal. There are still some sticking points, including a small, less than ½ of 1 percent across-the-board spending cut and a rollback of the dairy pricing plan. Both President Clinton and congressional Republicans claim some victory in the final package. Among other things, the President got the funds to hire more teachers and police officers, to acquire environmentally fragile western lands, and to underwrite the Middle East peace process and international debt relief efforts. For their part, Republicans point to boosting the defense budget, curtailing the President's spending requests, and after years of wrangling getting the administration to agree to abortion restrictions overseas in return for the payment of back dues at the United Nations. For more on the budget battle and its impact, we're joined by our regional commentators: Patrick McGuigan of the Daily Oklahoman; Cynthia Tucker of the Atlanta Constitution; Robert Kittle of the San Diego Union Tribune; and Lee Cullum of the Dallas Morning News. Welcome to all of you. Bob Kittle, we're in the closing hours of that annual fall classic, the budget battle. What do you think of the deal that is taking shape as we speak? ROBERT KITTLE: Well, to be quite candid, Terry, the goings-on in a slaughterhouse are more appetizing to watch than watching the enactment of the federal budget. I mean, it's a very messy process. And the real sad thing about this budget is, in my view, is that it is a business as usual budget. It's a monument to lost opportunities. We've done nothing in this budget to reform Social Security or Medicare, or to provide tax relief for the American people. Beyond that, we've also spent - this budget spends the surplus, the surplus that we're counting on to do big things, such as reforming Social Security or - in the eyes of Al Gore and Bill Bradley - create a new entitlement to extend health care to Americans. None of that will be possible if we continue to spend the surplus. And what this budget does is not only spend the surplus but dips into Social Security reserves by at least $17 billion, which is something that both the White House and the Republican leaders on Capitol Hill say they would not do. So I'm sorry, this is just a business as usual budget, and with an election year coming up next year, I think we're going to have more of the same, and more spending in excess of the spending caps, and, therefore, again, squandering the opportunity to do something significant with the surplus. TERENCE SMITH: Lee Cullum, when you look at this, do you see winners or losers? LEE CULLUM: Well, Terry, I guess you have to say that the family planning agencies are certainly feeling a sense of loss because of the deal that was made to get the U.N. dues paid. I have to say that I'm glad that the President and Congress came to that understanding. We do need to pay the U.N. dues. I'm sorry that the price is having to be paid by family planning organizations, but I hope it will turn out to be slight, and that there - the situation will be reversed in a year. It's only for a year. And it simply had to be done; it was necessary. So there is one loser. The winner is the U.N. and our relationship with the U.N., and that's certainly welcomed. TERENCE SMITH: Cynthia Tucker, do you think that President Clinton got what he needs for his last year in office? CYNTHIA TUCKER: I think he did better than I would have predicted a year ago today. I think that Republicans have largely conceded that President Clinton was going to win this budget battle, at least in its broader outline. Lee Cullum is absolutely right; the President had to make a very major compromise, and an unfortunate compromise, to get payment of U.N. dues. Other than that, however, he got much of what he wanted. Let's remember it wasn't but a few years ago in 1994 when Republicans were elected a majority in Congress; they came in pledging that they would abolish the Department of Education. Well, in fact, they ended up giving additional millions of dollars to the Department of Education to help hire more teachers; that was something President Clinton wanted. He got the proposal to have more police officers; he got more in environmental spending. So in shaping the budget priorities I have to say that the President came out more of a winner here, although I think that it's true that the GOP is going to go back and claim that they won on some important issues as well. TERENCE SMITH: Okay. Pat McGuigan, here in Washington with us tonight, how do you see the overall deal here? PATRICK McGUIGAN: Well, I look at it a little differently than everybody who has spoken so far. I think there's a lot of merit in what Bob had to offer, in particular. I think that it's not quite as bad as business as usual, and what I mean by that is simply to compare the numbers, I think it was something like $18 billion that the President managed to balloon the budget agreement last year; this time it's only $6 billion. I might be a little bit off on those figures. But the amount of inflation, if you will, in the process of negotiations wasn't quite as bad. And I think the Republicans did score some victories. I certainly applaud the outcome on the U.N. funding agreement, because what we're agreeing to pay is much less than what the U.N. was claiming that was owed. That's the first part. And the second part, the agreement on abortion funding, restores an understanding on that part of the budget that existed in the Reagan and Bush era, and it was an understanding that personally I applauded, and I think that the Republicans did a good job hanging tough on that, and they're at least partially getting their way, and that's how government works. So in that I'd give them some plus points. I take a different view than Cynthia on the education question and think it's unfortunate that the Republicans gave in, not so much on the money issue. There's probably room for some continued government - federal government - role in the funding of education, but it needs to be turned more and more into block grants, which Republicans have made modest progress towards doing to get that money back to the states and localities to decide issues like student/teacher ratio at the local level where it belongs. TERENCE SMITH: Bob Kittle, you made a passing reference there to a tax cut, or the lack thereof. Months ago, I recall you arguing strongly for one. Do you see it as a missed opportunity? ROBERT KITTLE: I certainly do, Terry. I think with the surpluses that we now have we - if we have fiscal restraint and with a limit on spending, there is plenty of room to have a tax cut. I think a tax cut is warranted, we raised taxes in 1992 in order to retire the deficit. The deficit more or less has been taken care of now. I think tax relief is in order. And quite frankly, I think there's a lot of blame that goes around on both sides here. The Republicans passed a tax cut of almost $800 billion over ten years, and the President vetoed it. At that point, the President said he was willing to agree to a smaller tax cut, maybe one of about half that size. And the Republicans at that stage, I think, dropped the ball when they decided, no, we're not going to bargain, we're going to use this as a campaign issue in the year 2000. So it's a missed opportunity. We could have had a tax cut of some sort. And again, in the year 2000, with the congressional and presidential elections -- election campaigns going on, we're not going to have progress on anything. Things will be at a standstill. We'll, you know, just continue things as they are they are. There won't be a tax cut next year, there won't be think progress toward reforming Social Security or Medicare. There really won't be any big decision made on what to do with the budget surplus, and, in fact, we'll only have that surplus if Congress shows some more fiscal restraint than it has shown this year. TERENCE SMITH: All right. Lee Cullum, speaking of the year 2000 and the election coming up, which of these issues do you think is likely to play in that campaign? LEE CULLUM: Well, Terry, I think the defense spending issue may very well play. I was glad to see that defense spending was increased. I think it's necessary. I was certainly glad to see a pay increase for our people in the military. It's outrageous that we have 13,000 military families on food stamps. It's unacceptable. So I think we may see this becoming an issue, and I hope it does. I think we need a national debate on our defense posture. TERENCE SMITH: Cynthia Tucker, what do you think, as far as the politics of this goes? CYNTHIA TUCKER: Well, Terry, I think that if in fact the Republicans try to use a tax cut in the 2000 elections, they will be playing to a very small audience. I think one of the reasons they gave up on that was because they saw that the American public did not view that as the... as a priority. Americans were much more interested in shoring up Social Security, for instance. But one of the things that I think may play in the 2000 campaign very strongly is something we haven't mentioned so far because it is not a budget issue per se, but that's the debate over patients' bill of rights. I think that that continues to be a strong point for the Democrats, and you talk about lost opportunities, I believe that the Republicans are going to come to regret on the campaign trail that they could not bring themselves to agree to a broad patients' bill of rights. TERENCE SMITH: Do you think, Pat McGuigan, do you think the Republicans will pay a price for that? PATRICK McGUIGAN: I think there is a potential for there to be a downside for the Republicans on that issue, even though essentially they're doing the right thing, they're fighting to continue having a marketplace in health care, rather than the slow-motion shift towards Clinton care that the President and some of his allies want. So they're doing the right thing, perhaps they're not doing the right thing in every particular vote. Personally I think the Republican position probably should be a little closer to that of Tom Coburn from Oklahoma, who has conceded some points on the criticisms of HMO's and other health organizations, but not gone as far as the Democrats. So politically, he might have a more palatable position for the Republicans. TERENCE SMITH: I saw you nodding your head when Bob Kittle was speaking of the tax cut. You're a chorus there? PATRICK McGUIGAN: Oh, yes, absolutely. I think that that was a missed opportunity, and I would probably agree with Bob -- it's like now we're having this argument over a relatively small budget reduction across the board, and that's the flip side of the very argument that Bob made about tax cuts. Let's take some of that surplus, whether it's apparent or real, I'm not completely convinced yet, but take some of that surplus and begin to have tax cuts for taxpayers. TERENCE SMITH: Well, Lee Cullum, that argument over now less than ½ of 1 percent is across-the-board tax cut -- spending cut, rather, excuse me -- is the sticking point right now. What's your view of that? LEE CULLUM: Well, Terry, you know, it's hard to argue. I think it amounts to about $1 billion or something like that. It's minor. And yet I was reading about Peter Drucker today in the "New York Times," whom I admire enormously-- he's now 90 years old and still brilliant-- and he was saying that it's better to cut out an activity, that is the best way to cut spending in any enterprise. It's silly to put less money into something that shouldn't be done at all in the first place. So I would actually rather see specific programs addressed and eliminated where they really aren't contributing. But I have to say that a 0.4 percent cut across the board is not going to be catastrophic at all. TERENCE SMITH: All right, Cynthia Tucker, a final word on that from you? CYNTHIA TUCKER: Well, I think it is important to remember the politics here. The reason the Republicans are insisting on this across-the-board cut, which I agree is foolish because it is arbitrary, is because they want to be able to say that they have not dipped into Social Security reserves. And there has been fiscal profligacy on both sides here and that is Republicans, too, have violated the spending caps that they agreed to in 1997, so they want this agreement so that they can be able to say that they were fiscal conservatives. TERENCE SMITH: All right, we have to go. Thank you all very much.

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