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Clinton to Cut Spending Further

By Eric Pianin
and Ruth Marcus

The Washington Post

President Clinton agreed Monday to roughly $55 billion more in spending cuts over the next five years, responding to pressure from House and Senate Democrats and calculations by the Congressional Budget Office that he needed to cut more to reach his deficit-reduction target.

White House press secretary Dee Dee Myers said Clinton "agreed to accept $55 billion in additional cuts" following a meeting with the House Budget Committee. He is to meet with the Senate Budget Committee Tuesday, whose chairman, Sen. Jim Sasser (D-Tenn.) also said he contemplated that amount of cuts, many from "slowing some investment programs in the beginning."

"I agree that we will have a budget resolution which will be roughly conforming to the reestimates of the CBO in general terms and that will still contain the investment strategy that I wanted to do," Clinton told reporters before a meeting with the Congressional Black Caucus.

Clinton, in a speech earlier in the day to the National League of Cities, made a pitch for his entire program of economic stimulus and new "investment" spending, along with tax increases and spending cuts to reduce the federal budget deficit. "We need to pass the whole program," he said. Clinton said those who oppose the short-term stimulus plan or additional "investment" spending "might be characterized as `status quo-like.' "

Moderate and conservative Democrats have complained for weeks that Clinton's package relied too heavily on tax increases to finance economic initiatives and to reduce the deficit and have demanded more in spending cuts.

But, as Myers acknowledged, the additional cuts that the House and Senate Democrats have settled upon would do little more than enable Clinton to achieve his original target of reducing the deficit to about $200 billion by 1997, $140 billion below the projected amount without any action.

In addition, a large chunk of the cuts -- about $17.5 billion of the roughly $55 billion -- would come in the fifth year. According to Sasser and others, the cuts would total about $3.8 billion in fiscal 1994 and $11 billion to $12 billion in fiscal 1995.

The cuts are necessary to keep Clinton's budget proposals beneath the spending caps imposed by the 1990 budget summit and to make up for lost ground after the CBO declared last week that Clinton's tax and spending proposals would fall about $67 billion short of his target of reducing the deficit over the next five years.

Although the CBO and the administration's Office of Management and Budget used different methods and assumptions in reaching their deficit projections, Clinton promised to abide by CBO's estimates to avoid criticism he was resorting to budgetary gimmicks or "smoke and mirrors" -- a criticism that the Democrats frequently leveled against the Bush administration.

House Budget Committee sources said the $55 billion cumulative figure was "in the ballpark," although committeee Chairman Martin O. Sabo (D-Minn.) and other committee Democrats were still meeting last evening to work out final details of the cuts. Aides to Sasser said Monday night that the additional cuts might be as high as $73 billion.

The additional savings would be achieved by delaying or trimming some of Clinton's proposed "investments" in the economy, as well as scores of cuts in other programs, including defense spending.

Sen. Sam Nunn (D-Ga.) chairman of the Senate Armed Services Committee, gave a speech last week warning fellow Democrats, including Clinton, who may be tempted to raid the defense budget for additional savings.

Rep. Barney Frank (D-Mass.) a Budget Committee member, said of the additional cuts, "It's probably not enough for Sam Nunn to fear for the safety of Georgia."

Members of the Black Caucus told Clinton Monday that his cuts have hit federal workers too hard and asked him to reconsider some details. "I don't think the president has looked at this package as a whole," to consider how it affects federal workers, District of Columbia Del. Eleanor Holmes Norton said. Asked about whether she and other caucus members would support that additional $55 billion in cuts, she said, "We haven't seen it yet so we didn't complain about it yet."

The House and Senate Budget committees are scheduled to meet Wednesday to draft budget resolutions that will form the blueprint of Clinton's nearly $704 billion in tax increases and spending cuts over the next five years to help boost the economy and reduce the deficit.

Clinton's proposal for spending about $16 billion this year to accelerate the economic recovery has been challenged by Republicans and some Democrats who question the need for it in light of a decline in the unemployment rate and a gradual expansion of the economy.

However, House Majority Leader Richard A. Gephardt (D-Mo.) who attended the White House session, told reporters, "I think it's going to pass largely intact."