The new budget President Clinton released this week was supposed to
attack big government. Big government won.
Over seven years, President Clinton's fiscal year 1997 budget
proposes $358 billion in higher spending and $232 billion in higher
federal tax revenues than the balanced budget submitted to him by
Congress last fall, which he vetoed. That amounts to $3,580 in
higher spending and $2,320 in higher tax revenue for every
household in America. So much for "the end of big government."
And what about the deficit candidate Clinton vowed to slay
within five years if elected? Compared to the 1995 Balanced Budget
Act, the president's new budget adds $125 billion in new red ink
through the year 2002. That amounts to increasing the debt burden
on every household by $1,250.
But give the president credit -- for some exceptionally brazen
budget gimmickry. On paper, his fiscal year 1997 budget balances by
2002, but only by leaving the real work of deficit reduction to a
future president and Congress. Consider: The White House budget
purports to save nearly $600 billion over seven years, but only 40
percent of those savings would come during Clinton's second term in
office, if he wins.
Simply put, it's a lot easier to balance the budget when some
other president will bear the brunt of responsibility for deficit
reduction. Under the 1997 Clinton budget, the first president and
Congress of the next century would have to find 63 percent of the
savings -- not just from political lemons like foreign aid, but
from favored programs like Medicare and Medicaid.
Not only does the president leave the spending mess for someone
else to clean up, he hogs popular tax cuts for himself. Under his
budget, middle-class families would get a tax credit for each
child, increasing in value from $300 in 1997 to $500 by 1999. But
in 2002, the deadline for a balanced budget, Clinton's child tax
credit vanishes. The result in that year: an $18 billion tax
increase on families with children. But this doesn't worry the
White House either, since some future president will have to
deliver the bad news.
What's more, the president's budget offsets these tax cuts with
big tax increases. All told, the White House budget contains $99.7
billion in tax cuts and $62.4 billion in tax increases. New taxes
exceed the president's proposed seven-year Medicaid savings ($59
billion) and surpass by half his proposed welfare cuts ($40
billion). In the end, the net tax cut is $37 billion, or just 3
cents of every $1,000 taxpayers will send to Washington over the
next seven years.
And let's not forget: This is the same president who said he
would work with Congress to craft some kind of capital-gains tax
cut. But not only does his budget propose no such tax cut, it calls
for $4 billion in higher capital-gains taxes over the next seven
years.
Meanwhile, the president's budget treats entitlement programs
such as Medicaid and Medicare -- the real engines behind
uncontrolled spending growth -- with kid gloves. In fact, spending
on entitlements steams ahead by $370 billion, or 50 percent, over
seven years. For all "mandatory" programs, spending would grow from
49 cents of every federal dollar today to 59 cents of every federal
dollar in 2002.
This threatens not only the country's solvency, but the future
of entitlement programs themselves. In less than 15 years, spending
on entitlements and debt interest will consume nearly every dollar
in the federal budget, according to the Bipartisan Commission on
Entitlement Reform headed by Sen. Robert Kerry, D-Neb., and retired
Sen. John Danforth, R-Mo.
The president's response? His budget proposes to slow the growth
of Medicare spending by $124 billion over seven years -- not nearly
enough to save the program from collapse. For Medicaid, the
situation is just as bad. If nothing is done to reform the program,
runaway costs could force states to raise taxes or cut spending by
$146 billion. And the president's proposed "reform" -- placing a
cap on how much the federal government will spend per Medicaid
beneficiary -- could slap $47 billion in new costs on already
cash-strapped states.
There is one area of the budget, however, where the White House
does propose real change: spending on presidential "pork" gets a
big boost. Clinton's budget outlines a sweeping agenda of new
spending initiatives on priorities important to politically
influential special-interest groups: education (teachers' unions),
high technology (corporations) and the environment ("green"
activists). Compared to Congress' balanced budget, the president
would shovel an extra $106 billion over seven years to programs
supported by such groups.
Let's face it. The president's budget -- while claiming,
technically, to eliminate the deficit by 2002 -- is just more
obfuscation, smoke and mirrors. It is not the end of big
government, it is the embodiment of it.
Note: Scott Hodge is former Grover M. Hermann fellow in
federal budgetary affairs at The Heritage
Foundation, a Washington-based public policy research
institute.