The Economics Section - Page A2
PRESIDENT CLINTON'S LAST CHANCE
by Staff Journalists, The Daily Republican Newspaper
WASHINGTON BUREAU - President William Jefferson Clinton is already having difficulty in coming-up with the balanced budget for the U.S. government. He has made several requests on national radio and TV for Republican guidance since the November 5th election. Republicans say their balanced budgets have been vetoed by the president for political purposes.
On Saturday, five days after the election, he told the American people on ABC-TV that he has asked the Republicans about how to best balance the budget. He said, 'That's plainly the message of the election. They want us to work together. Its a yearning. Its almost an aching out there!'
In other words, the president is claiming that the American people want the Republicans in Congress to do the president's job. The Republican majority is saying, 'Not this time!'
David Brinkley knows how most of the American people feel about William Jefferson Clinton. In a late-night chat on election night, the 76-year-old broadcaster said of Clinton's acceptance speech 'One of the worst things I've ever heard. He's a bore and will always be a bore!' That's more like what the American people are really saying.
Some elections clarify basic choices. But the election on November 5th obscured things. Bill Clinton ran as a dream Democrat, promising to protect entitlement for seniors, stop cuts to popular programs for children and balance the budget.
William Jefferson Clinton's executive department staff includes millions of plum jobs for people who should be able to put the balanced budget together unless he has appointed unqualified persons. There are some 3,000,000 jobs in the executive branch, and no one there can get the job done.
Why does the president need Republicans to set-up the budget? One reason is that one seventh of the budget, the $250 billion for interest on the national debt, is untouchable. That's the price of 15 years of living beyond our means. What remains is spending for all manner of programs, which is where the choices begin and the president's election promises put those areas 'off-limits' to in the budgeting process.
Entitlements - benefits paid automatically to millions of mostly middle-class and elderly Americans - account for nearly two thirds of the government's budget for programs. The biggest is Social Security. Neither party wants to tangle with it. They don't want to mess with the second biggest, Medicare, either, but there isn't much choice. It's a $200 billion behemoth and growing fast.
The president has a plan for Medicare: to shave its growth by paying health care providers less and thus save $116 billion over the next six years. That's just enough to keep the Medicare trust fund from going broke -on his watch, at least. Plus he'll appoint a bipartisan commission to recommend a long-term fix. And he'll pray for a miracle to solve the problem for him: say, a doubling of economic growth.
Although the last two bipartisan budget commissions - one in the Reagan-Bush years, another in Clinton's first term--dissolved into partisan pie fights, a commission may offer the best chance for major reform.
Clinton won re-election by demonizing the last try at Medicare reform proposed by the congressional Republicans.
There are no easy defense cuts left. America already has 80% of its active-duty military relying upon food-stamps. Another sixth of the program budget is defense. Clinton plans to bring the Pentagon down 10 percent by 2002. He probably can't cut much more. Defense cuts have accounted for all the net reductions in spending since the peak deficits of the mid-1980s. The easy cuts are gone.
What remains is just over one sixth of the program budget for 'nondefense discretionary spending.' Those dollars are allocated for federal prisons, national parks, Head Start, medical research, the weather service and president Clinton's unfulfilled promise to put 100,00 police officers on the streets of American cities.
The president has claimed during the campaign that he will balance the budget by 2002 mostly by scaling-down these federal programs. His numbers don't support his political rhetoric, however.
Robert D. Reischauer, a former Congressional Budget Office director said the Republican Congress wanted to reduce nondefense discretionary spending by 24 percent in the year 2002. The Clinton plan would require a 22 percent reduction, a barely consequential difference. Chopping almost a quarter off the government would reduce this everything else portion of domestic government to about the level of the early 1950s, as a share of the economy.'
Clinton says that he wants to increase education and job-training programs modestly over the next six years, and that he wants to protect federal law enforcement from budget cuts. But for everything he protects he must doubly cut into program services he pledged in his re-election campaign not to touch.
The inevitable consequences of Clinton's balancing the budget by the year 2002 is devastating to the nation. Community and regional development-- assistance to states and localities, spending to relieve urban blight and so on -will decline almost two thirds by 2002.
That is 33% more cutting than Newt Gingrich's last Congress proposed budget plan that Clinton vetoed.
Under Clinton balanced budget, Transportation aid would decline by almost 40 percent, half again the cuts proposed by the Republicans.
The real message of the election, the one that president Clinton is concealing from the American people is that you can't run as a Democrat and govern as a limited-government Republican.
William Jefferson Clinton's re-election campaign theme wrote the terms for a second Clinton administration in stone: there will be a host of small initiatives that will hand out more money for welfare, more money for entitlement, and very few real budget reductions, and then he leaves office and someone else has to face an insurmountable budget deficit and skyrocketing inflation.
The Republican plan for balancing the budget was Clinton's last workable alternative. He vetoed it. Now its his turn. That's the real message of the election.
It is obvious, Medicare must rely more on managed-care providers and other private-sector, cost-cutting systems, instead of on government price controls.
The qualifying age needs to go up, and benefits need to go down for higher-income people.
Wealthier Americans could live without their federal subsidies. Applying an income test to entitlements and making them taxable for richer recipients could save up to $400 billion between now and 2002.
In 1995, Newt Gingrich tried to push through some major reforms in government spending which the public was being told were 'mean spirited' 'extreme' and 'wrong' by president Clinton. The president promised he would 'never do such things'.
Looking backward, president Clinton wishes he had not run against Newt Gingrich's plan. Now Clinton needs Gingrich again but the president is left without any choice but to 'face the music and dance'.