TOPICS > Politics

Budget Battle

October 20, 1995 at 12:00 AM EDT


ROBIN MACNEIL: First tonight, jockeying over the budget. A tax cut, reforming Medicare, Medicaid, and welfare, and government programs from farm subsidies to funding for the arts are all part of the balanced budget plans that both the House and Senate are expected to vote on next week. Today, all sides were gearing up for battle. Kwame Holman begins our report.

KWAME HOLMAN: On Capitol Hill, all the talk is about reconciliation.

SEN. ROBERT DOLE, Majority Leader: I’ll need 50 votes next Thursday or Friday on this big, big reconciliation package.

SEN. TOM DASCHLE: It’s all wrapped up in the negotiations involving this and involving the, the reconciliation package.

SEN. PETE DOMENICI, Chairman, Senate Budget Committee: This committee is not taking testimony on a reconciliation bill.

REP. JOHN KASICH, Chairman, House Budget Committee: Reconciliation–the dumbest word I’ve ever heard in my life–you’d think it’s something the Catholics do on Saturday.

KWAME HOLMAN: In fact, reconciliation is the end game of the congressional budget process. All the spending and tax decisions made by the various committees during the year are rolled into one giant piece of legislation. It reconciles those decisions with the balanced budget targets set earlier this year by the budget resolution. Reconciliation is considered particularly critical this year because of the revolutionary changes made in the budget by the new Republican Congress.

SEN. ROBERT DOLE, Majority Leader: We’re talking about big, big fundamental change, a balanced budget by the year 2002, strengthening Medicare, preserving Medicare, reforming welfare, and tax cuts that some of you might have an interest in.

SEN. TOM DASCHLE, Minority Leader: This is a very dramatic draconian change in priorities, the likes of which we’re going to see unveiled and unrolled now for the next several weeks.

KWAME HOLMAN: This afternoon, with all of those momentous tax and spending decisions piled before him, Senate Budget Committee Chairman Pete Domenici hoped members of his committee would act quickly in fulfilling their role in the reconciliation process.

SEN. PETE DOMENICI, Chairman, Senate Budget Committee: Our job is to package this up as debated and as reported by the 11 committees and send it to the floor of the Senate.

KWAME HOLMAN: But Committee Democrats, little more than bystanders throughout the entire budget process, seemed reluctant to let the process end.

SEN. KENT CONRAD, (D) North Dakota: These are the budget priorities for the United States for the next seven years. That is going to have enormous consequences for the American people. I think the American people deserve, given the fact that we’re to vote on this, a chance to have a debate and a discussion about what’s in this. I hope you’re not afraid of having a discussion about what’s in it.

SEN. PETE DOMENICI: Look, man. You understand this, Senator. I’m not afraid of having a debate on anything.

KWAME HOLMAN: And when Democrats wanted to bring out four sympathetic witnesses, Chairman Domenici immediately cut off their request.

SEN. PETE DOMENICI: I’m going to rule that taking testimony at a reconciliation report session is not in order, and we’re not going to do that.

SEN. BARBARA BOXER, (D) California: Have we turned into a non-democratic committee?

SEN. PETE DOMENICI: Yeah, we kind of have when it comes to whether you’re going to open a committee that doesn’t take testimony to taking testimony.

SEN. BARBARA BOXER: Well, that’s an interesting kind of a statement that we suddenly can’t have a vote, when so many members feel–


SEN. BARBARA BOXER: –that this is going to impact so many people.

SEN. PETE DOMENICI: We’re not going to take selected testimony from three or four people. What if we said we need ten, and then we ask the Finance Committee, how many do you need, and they said, to be fair, we want twenty? That isn’t our mission; that isn’t our role; and frankly, you all can raise it as much as you want. We’re not going to have witnesses testifying before this committee.

KWAME HOLMAN: But without the cooperation of Democrats, Domenici had no choice but to put off a committee vote on the reconciliation package until Monday evening.

SEN. PETE DOMENICI: Having said that, we are adjourned.

KWAME HOLMAN: House Budget Committee Chairman John Kasich had his problems too but within his own party.

REP. JOHN KASICH, Chairman, House Budget Committee: Well, we’re facing the problem with sacred cows, literally.

KWAME HOLMAN: Even though Kasich’s committee completed its work on reconciliation last week, it had to leave out some controversial cuts in agriculture subsidies due to the objections of some farm state Republicans.

REP. JOHN KASICH: But I think that the agriculture changes have unleashed a momentum that everybody who is involved at all in agriculture understands cannot be stopped. In other words, a sugar program that relies on dumb subsidies and setasides and that lacks market-oriented foundations, that program’s days are numbered, the same with peanuts. The milk program is going to undergo significant change. It’s just we’ll get as much as we can done this round, and then we get a farm bill, I think we’re going to see even more change.

KWAME HOLMAN: Both the House and Senate expect to vote on their respective versions of reconciliation by the end of next week. In the meantime, members of both parties will be fighting the battle of public opinion.

JIM LEHRER: Now, more on where this story seems headed from Susan Dentzer, chief economics correspondent for “U.S. News & World Report.” And where is it headed? I mean, is there–obviously, there’s a collision today. Is there still going to be a collision a week from today?

SUSAN DENTZER, U.S. News & World Report: Well, Jim, if only we knew the answer to that question. In effect, what’s happening now is that the Republicans are moving down a track that they’ve wanted to move down for some time. They’re drawing up a large plan now to balance the budget over seven years. They’ve put together the pieces of it. The House vote yesterday on Medicare was a large piece of the House’s side of that equation. But actually, President Clinton has stepped out of the bushes and yelled, “surprise,” which is that he’s thrown a monkey wrench into this process and effectively said that he too is in favor of a seven-year budget deal. This throws everything open and up for grabs.

JIM LEHRER: Why? Why is that?

MS. DENTZER: In the sense that, as I say, I think the Republicans were assuming that they would be moving down the track; they would be sending the President a reconciliation bill. And, remember, reconciliation is tax changes–law changes, and the mandatory program changes.

JIM LEHRER: Why is it called reconciliation?

MS. DENTZER: Because it’s an attempt to reconcile the fiscal policy of the nation with the budget targets set forth earlier in the year by both Houses of Congress. In effect, it changes tax policy, and it changes entitlement spending policy to bring it into line with overall budget targets.


MS. DENTZER: And as the Republicans attempt to move this forward and have been hoping to move this forward, they essentially wanted–who were thinking that they were going to, in effect, ram it down the President’s throat because they were going to tie it to an increase in the ceiling on the federal debt, which has to be expended if the government is going to continue to run its business.

JIM LEHRER: So they stuck that on there feeling that the President wasn’t about to veto this and shut down the government, so he had a little game going on.

MS. DENTZER: Exactly right. Now, as I say, the President has stepped out of the bushes and, in effect, yelled, “Surprise! I’m willing to talk about a seven-year budget deal.”

JIM LEHRER: Before it was a ten. He wanted a ten-year plan.

MS. DENTZER: Yes. Technically, nine years. Right.


MS. DENTZER: And, in fact, now we have everything thrown open. It’s really not clear how things are going to proceed from here on out.

JIM LEHRER: When Sen. Daschle says, as he said in our piece just now, hey, the President is going to veto this, the President must veto this, who’s he talking for?

MS. DENTZER: Well, he is speaking for the President, because out of the other side of his mouth, the President has, indeed, been saying that he’s going to veto this particular set of changes that the Republicans have put through on Medicare in particular, and he’s also talked about vetoing the Medicaid changes. But in a way, that’s just a way of saying I don’t want your particular sizes of cuts, $270 billion in Medicare over seven years, $182 billion in Medicaid over seven years. He’s, in effect, by saying he’s open to a seven-year budget deal, saying, I’m open to some bigger numbers that I personally, Bill Clinton, have been talking about, and as I say, leaving the door open for a deal to be struck.

JIM LEHRER: And do you smell a deal?

MS. DENTZER: I think there’s no question but that there’s going to eventually be a deal. It’s in the interest of President Clinton to have a deal. He’s clearly trying to carve out an image for himself as a new Democrat, a Democrat that essentially is going to take the fiscal problems of the nation seriously and put us on a path toward a balanced budget. So I think it’s clear that it’s going to happen. I think that the stakes are very high. One of the things he clearly is going to insist upon and one of the reasons he’s able to even talk about a seven-year deal is he knows that he’s got some economic assumptions in his budget that the Republicans probably have to sign onto if they’re all going to agree on a deal. So he–he’s going to have to force them to do what they have said that they don’t want to do, which is accept his assumptions about the economic forecast in order to have this deal come together.

JIM LEHRER: And the word “big deal” applies in this case, the two words, “big deal,” applies in this case, does it not? This is a big thing that’s happening there.

MS. DENTZER: Well, no question about it, because certainly in the last 10 years, we’ve never had a deal struck that would actually eliminate the budget deficit over even a seven/ten, whatever year period, so if this actually were put through, it would be, indeed, a big deal, and it’s–it’s also important to note that the changes in Medicare would be far reaching perhaps beyond the seven-year horizon because, in effect, we start to get into a position with Medicare when the baby boomer retires, where the costs of Medicare become totally unsustainable. If the President really is willing to accept some of the changes that the Republicans have proposed, that is in a way setting the stage for a broader series of changes that would rein in the costs of Medicare over time.

JIM LEHRER: Okay. Thank you, Susan.