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Clinton Budget 'Embodiment' Of Big Government, Heritage Foundation Writer Declares.

MAR. 11, 1996

Clinton Budget 'Embodiment' Of Big Government, Heritage Foundation Writer Declares.

DATED MAR. 11, 1996
DOCUMENT ATTRIBUTES
  • Authors
    Hodge, Scott A.
  • Institutional Authors
    Heritage Foundation
  • Subject Area/Tax Topics
  • Index Terms
    budget, federal
    budget, federal, deficit
    Medicare
    Medicaid
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 96-8269 (3 pages)
  • Tax Analysts Electronic Citation
    96 TNT 56-53
====== SUMMARY ======

"The Clinton budget is not the end of big government, it is the embodiment of it," Heritage Foundation fellow Scott Hodge said in a release about his study of the proposed 1997 White House budget.

Hodge said some of the negatives in the president's proposal are $1,927 in higher taxes and $3,155 in higher spending over seven years per household, compared with the 1995 balanced budget plan Clinton vetoed; $119 billion more in deficits through 2002; and 50 percent more spending on entitlement programs such as Medicaid and Medicare over seven years.

The real changes proposed by Clinton are for social programs such as education, high technology, crime fighting, and the environment, Hodge said. Compared with the Balanced Budget Act of 1995, this proposed spending will be an extra $111 billion over seven years.

====== FULL TEXT ======

NEW WHITE HOUSE BUDGET CONTAINS BIG

 

SPENDING, TAX INCREASES, STUDY SHOWS

[1] WASHINGTON, MARCH 11, 1996 -- Although the 1996 budget battle between Congress and the White House is still unresolved, President Clinton has already released a new 1997 budget that boosts spending by $361 billion and tax revenues by $526 billion over the next seven years, according to a new report by The Heritage Foundation.

[2] For every household in America, the new White House budget means $1,927 in higher taxes and $3,155 in higher spending over seven years, compared to the 1995 Balanced Budget Act that the president vetoed last fall, says Heritage budget specialist Scott Hodge.

[3] Moreover, the White House budget would add $119 billion more in deficits through 2002 than Congress' Balanced Budget Act, the equivalent of increasing the debt burden on the average household by $1,227, Hodge says.

[4] "Just weeks after telling the nation in this year's State of the Union address that the 'era of big government is over,' President Clinton [has] indicated that the obituary notice was premature," says Hodge, Heritage's Grover M. Hermann fellow in federal budgetary affairs.

[5] He says while the White House plan would, on paper, balance the budget by 2002, it can only do so "by leaving the real work of deficit reduction to a future president and Congress." For example, the budget claims to save $596 billion over the next seven years, but fully 60 percent of that deficit reduction is scheduled to happen after President Clinton leaves office.

[6] What's more, the family tax cuts in the president's plan come in the early years, then screech to a halt in 2002, the deadline for a balanced budget. The result: Families depending on a planned $500-per-child tax credit would get hit in 2002 with a $17 billion tax increase. What's more, the president offsets the $98 billion he proposes in tax cuts with $59 billion in tax increases. The resulting net tax cut of $39 billion represents just 3 cents of every $1,000 taxpayers will send to Washington over the next seven years, Hodge says.

[7] While tax relief under the White House budget is negligible, spending on entitlement programs such as Medicaid and Medicare steams ahead, increasing by $365 billion, or 50 percent, over seven years. All told, spending on "mandatory" programs under the White House budget would rise from 49 cents of every federal dollar today to 59 cents of every federal dollar in 2002.

[8] And although the president proposes to reduce the growth of Medicare spending by $124 billion over seven years, that's not nearly enough to save the program from impending bankruptcy, Hodge says. In fact, the news that in 1995 the Medicare Hospital Insurance program paid out $36 million more in benefits than it took in from payroll taxes shows the program could face a financial crisis even sooner than the projected bankruptcy in 2002.

[9] The situation with Medicaid is just as bad. If nothing is done to reform the program, Hodge says, states probably will need to raise taxes or cut spending by $146 billion over seven years to pay for it. The White House response is to slow Medicaid spending increases by $59 billion over the same period, which does little good when maintaining the program's entitlement status could cost states more than $47 billion.

[10] There is Hodge says, one area of the budget where the White House does propose real changes: spending for social programs is greatly expanded. While short on details -- which are scheduled to be supplied in the administration's full budget due later this month -- the current White House budget "outlines a sweeping agenda of spending initiatives in areas such as education, high technology, crime fighting and the environment," Hodge says. Compared to the Balanced Budget Act, the president proposes spending an extra $111 billion over seven years on discretionary programs.

[11] Yet oddly, Hodge says, the White House also claims to "save" $297 billion in discretionary programs over seven years. Of course, these savings are calculated by using the Congressional Budget Office's "baseline," which assumes automatic spending increases every year. Under this accounting system, simply freezing discretionary spending at 1995 levels would "save" $258 billion over seven years. The extra $39 billion the president proposes to save? Hodge says 95 percent of these cuts come in 2001 and 2002, when President Clinton can no longer be in office.

[12] "The administration's repeated use of gimmicks and accounting ploys . . . casts doubt on its sincerity in negotiating a balanced budget plan with Congress," Hodge says. "The Clinton budget is not the end of big government, it is the embodiment of it."

DOCUMENT ATTRIBUTES
  • Authors
    Hodge, Scott A.
  • Institutional Authors
    Heritage Foundation
  • Subject Area/Tax Topics
  • Index Terms
    budget, federal
    budget, federal, deficit
    Medicare
    Medicaid
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 96-8269 (3 pages)
  • Tax Analysts Electronic Citation
    96 TNT 56-53
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