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Clinton Submits Proposal To Balance Federal Budget

By Ann Devroy
The Washington Post
WASHINGTON

President Clinton Monday dressed up his last budget offer to Republicans in new rhetoric and submitted it as his 1997 proposal to balance the budget, holding off until the turn of the century the bulk of his spending cuts.

Clinton's budget proposal, required by a legal deadline, gives new meaning to the "dead-on-arrival" budget cliche from the years Republican presidents submitted doomed proposals to Democratic Congresses.

With the White House and Congress deadlocked over this year's budget and the government running on temporary spending measures, the outline for the next fiscal year, beginning on October 1, a month before the presidential and congressional elections, has little to do with policy and everything to do with politics. The proposal presents a bare-bones outline of a $1.64 trillion budget for 1997 that offers modest reforms in entitlement programs, large cuts in domestic programs and small tax breaks for the middle-class.

The 20-page outline released Monday -- compared to the usual 2,000-page plus budget submission in a normal budget year -- was nearly identical to the offer Clinton put on the table the first week of January when he and GOP congressional leaders were still negotiating. Republicans charged the White House refused to make serious offers on the most contentious issues -- Medicare savings and tax cuts -- and called off the talks.

The outline projects the 1997 deficit will be $160.6 billion, up slightly from this year's estimated $154.4 billion shortfall. Beginning in 1998, the president foresees declining red ink until 2002 when he projects a $3.7 billion surplus.

As he did in his last offer, Clinton proposed to trim growth in Medicare by $124 billion, compared to $168 billion in the last GOP plan. He would save $59 billion in Medicaid, compared to $85 billion in the GOP plan. Domestic spending other than entitlement programs would be trimmed by $297 billion, about $51 billion less than the GOP would.

Clinton is proposing $98.5 billion in tax relief, mostly in the form of tax credits for parents, tax deductions for education and training expenses and breaks for small business. About $59 billion in corporate tax breaks would be eliminated.

The president's middle class tax cuts would stay in place in the years 2001 and 2002 only if the economy does better than the Congressional Budget Office now projects.

"The plan I propose cuts hundreds of programs, continues our efforts to downsize the government, but it protects Medicare, Medicaid, education and the environment and cuts taxes for working families," Clinton told the nation's governors at the White House Friday.

But the cutting mostly occurs after this election year, and far into the future. The 1997 savings in domestic discretionary spending, for example, would decrease to $10 billion from the 1996 figure of $12 billion, and would reach significant levels of $74 billion and $96 billion the final two years of the seven-year plan.

Former Sen. Paul E. Tsongas, (D-Mass.), who heads a bipartisan group promoting fiscal discipline, called the Clinton budget "cynical" and "intellectually dishonest."

"What is driving the White House is re-election," Tsongas told a news conference.

He said the budget plan does too little to control spending on entitlement programs and offers unwise tax cuts in the election season and first years of the plan while waiting until later to make the painful spending cuts.

"It frontloads the joy and backloads the pain," he said.

Republican leaders rejected the plan when it was first proposed. Yesterday the Republican leaders rejected the plan again. House Budget Committee Chairman John R. Kasich, (R-Ohio), described Clinton's budget as "simply warmed-over status quo."

"It's a spend now, save later scheme that is wholly inadequate," Kasich said.

"It avoids real entitlment reform, backloads spending, and has virtually no details," Kasich said.

The White House announced that the details -- how each agency and each program would be affected by the new budget -- would be released by the middle of March. Because several 1996 annual spending bills are still not finished and the government has uncertain figures to work and calculate with, officials said they were unable to put down anything more than what Clinton called "a thematic overview of my priorities."