Two
years ago, President Bill Clinton eagerly embraced and pledged
himself to honor the Balanced Budget Agreement (BBA) of 1997, the
spending roadmap to achieve and maintain a budget surplus. The
President repeatedly took credit for the BBA, claiming in a summer
1997 speech to be "spending less and spending smart." He also
stated in a radio address that "Our balanced budget agreement shows
what we can accomplish when we work across party lines, in the
interests of the American people. This is how government should
work."
The
problem is that today, when tough spending decisions have to be
made to carry out the agreement, the President is missing in
action. In fact, the President delivered a budget to Congress
earlier this year that busts the caps agreed to in 1997, and he
seems unwilling to do anything now to help Congress keep spending
under control.
The
White House, not just Congress, must remain committed to honoring
the BBA. As the President declared to a business roundtable in
1997, "It is essential now to implement the agreement in good
faith. It is quite specific, and ambiguous on very, very few
points. If we had enough changes around the edges that some want to
make, pretty soon we could make the edges ragged enough to unravel
the fabric of the agreement. I do not expect that to happen. I
expect it to be implemented."
Congress must hold the President to his
word.
BUSTING CAPS AND BREAKING PROMISES
In
the spring of 1999, the Congressional Budget Office (CBO) concluded
that the President's fiscal year (FY) 2000 budget proposal
submitted to Congress would violate the BBA, thanks to $30 billion
in spending above the caps. The President's response to
the CBO's report was offered by a White House budget office
spokeswoman: "The offsets exist. It is simply a matter of the CBO
choosing to put our offsets in a different category than we have."
When pressed on the details, an Associated Press journalist noted
at the time, "[President] Clinton said his plan would live within
spending limits by paying for several initiatives by raising the
tax on cigarettes, increasing other fees and reducing spending on
some programs." Unlike the CBO, the White House fails to recognize
the difference between raising billions in revenues and holding
spending in line.
While the President engages in budget
semantics, Congress has been left with the difficult task of
actually implementing the BBA. To do this, it first enacted a
budget resolution that maintains the spending levels agreed to in
1997. Now both houses of Congress have announced "302b" funding
allocations for their respective appropriations subcommittees that
keep spending within the agreement. As the table shows, the House
committed itself to reducing FY 2000 discretionary spending by 1.2
percent, and the Senate committed to finding savings of 2.3
percent. Meanwhile, the President has proposed increasing
spending by 3.6 percent.
AVOIDING THE TRAP
Having made several tough decisions
already, Congress is faced with the even more difficult task of
enacting appropriations bills that meet these funding allocations.
According to Senate Appropriations Committee Chairman Ted Stevens
(R-AK), "We're heading for a collision that will take us to
September." But the President has offered no help whatsoever. The
White House merely offered thinly veiled threats of a presidential
veto if tough cuts are made.
Meanwhile, the ranking minority member of the House
Appropriations Committee, David Obey (D-WI), is pushing Congress to
abandon the agreement. "You can't get this fix," says Obey, "until
the Republicans...summon the determination to go around the caps."
The majority in Congress made that mistake in September 1998,
hoping to curry political favor by voting for increased spending,
but regretted this decision by November. Congress should not make
the same mistake twice. The problem will only get worse each year
that appropriations exceed the caps.
CONCLUSION
The
spending caps should not be broken nor the BBA violated. The
President must make this clear by working with Congress to stay
within the BBA's spending provisions. Congress, too, must maintain
fiscal discipline and respect the spending caps committed to in
1997.
Lawmakers will be able to do this only if
they summon the determination to hold down spending and challenge
the President to make a clear decision: Keep to the bargain he made
or veto fiscally responsible spending bills that stay within the
caps and protect the Social Security surplus. The President claims
he maintained the agreement this year, but he submitted a budget
that used the gimmick of tax increases and new user fees to mask
the costs of new government spending. It is time to put the
President's pledge to "spend less and spend smart" to the test.
Peter Sperry
is Budget Policy Analyst in The Thomas A. Roe Institute for
Economic Policy Studies at The Heritage Foundation.