Congress Balks At Tide of Red Ink In Clinton Budget

THE budget hawks in Congress are sharpening their claws again.

President Clinton's new $1.52 trillion budget promises to reduce deficit spending to $176 billion in 1995, the lowest level in five years. But when congressional budget cutters look further ahead, they are appalled.

The Clinton five-year plan would send the national debt spiraling to over $6 trillion - up 38 percent by 1998, says Rep. John Kasich (R) of Ohio, a leading deficit hawk. Year by year, the official White House figures show no relief: a $173.1 billion deficit in 1996, $180.8 billion in 1997, $187.4 billion in 1998, and 201.2 billion in 1999.

The White House had to soothe critics like Representative Kasich with promises of savings from health care. The president's health plan would trim federal outlays, and soon move the budget toward balance, presidential aides said.

At midweek, however, that optimistic scenario suddenly darkened. The nonpartisan Congressional Budget Office (CBO) told lawmakers that the president's health plan would add $74 billion to the deficit over the next six years, not cut the deficit $58 billion as the White House predicted.

Rep. Timothy Penny (D) of Minnesota says the CBO report puts Clinton on the spot. it warns that if the Clinton plan passes, it won't save any money until 2005. Representative Penny says: ``We can't sustain $180-billion or $200-billion annual deficits for the next five to 10 years while we're waiting for health care reform to work.''

Kasich compares the president's spending plans to ``treading water.'' The war against deficits is going nowhere.

The views of Penny and Kasich could be in the forefront if opposition to the Clinton plan grows. In November, they advanced a bipartisan program to whack Clinton's 1994 spending plans by $90 billion. To the shock of nearly everyone, they came within four votes of winning in the House.

Rep. Martin Sabo (D) of Minnesota, chairman of the House Budget Committee, defends the Clinton budget. If the economy keeps growing, and if health care reform passes, Clinton will have solved the ``core'' problems that make it difficult to balance the budget in the long run, he says. Sen. Jim Sasser (D) of Tennessee, chairman of the Senate Budget Committee, likewise insists: ``We're moving in the right direction.''

Interviewed as he walked from the Capitol to his office, Senator Sasser said the Clinton budget represents ``solid progress'' toward a balanced budget, especially after the mammoth deficits of the Reagan and Bush years. Red ink topped $290 billion in 1992, the last full year under Republicans.

``We actually haven't had a balanced budget since 1969, but for the first time in well over a decade, we're seeing substantial progress in that direction,'' Sasser says.

The senator concedes that the 1999 projections show a deficit of $180 billion. But he argues that without Clinton's budget, which he called ``one of the most penny-pinching budgets that we've had in years,'' the 1999 deficit could be $300 billion.

Getting the deficit down to zero is another matter, Sasser admits. That would take ``more policy changes, if people are serious.'' What kind of changes? ``More reductions in the defense budget,'' the senator suggests. And medical programs would have to be on a ``totally self-financing scheme so they are no cost to the Treasury.'' More taxes also might be necessary, including higher taxes on social security.

The ease with which the Clinton team and its allies in Congress have accepted on-going deficits into the late 1990s worries some analysts, however. Martha Phillips, director of the Concord Coalition, says the new budget convinces her that Clinton has given up the fight against red ink.

Ms. Phillips says: ``They're not interested in serious deficit reduction.... Some administration officials are still arguing that it [deficit re- duction] would be damaging to the economy. Others just say they have higher priorities.''

Kasich says Clinton is missing a rare opportunity. The final Bush years were a recession. Higher federal spending was essential to aid the jobless. Now the nation's economy is growing. He says: ``Now is the time to make some dramatic changes to reduce the overhead of the federal government, and they haven't done it. The president came into town saying he was going to bring a lot of change.... But this budget doesn't represent a `change' agenda.

``We have lulled ourselves,'' Kasich says. ``We are almost anesthetized by deficits.''