Clinton challenge on budget cuts
Tuesday 07 February 1995
The budget is, however, merely the opening gambit of what may turn into a bidding war between the administration and Congress, where the Republican majority is committed to much the larger reductions in both taxes and spending contained in the "Contract with America" manifesto on which it so success- fully fought last November's mid-term elections.
Hardly had the President finished speaking than Senator Pete Domenici of New Mexico, chairman of the Senate Budget Committee, served notice that his plan would at best be only an ingredient in the budget which Congress finally sends to the White House for signature (or more probably, veto) later this year. It was "not dead on arrival but already on life support", Mr Domenici said.
The bulk of Mr Clinton's spending cuts - $101bn - are generated by reducing and re-organising more than 270 federal programmes. In addition, the President wants to scrap 131 smaller schemes, saving just under $2bn. The brunt will be borne by second-tiercabinet departments such as Housing, Transport and Energy.
But in some areas spending is going up, most notably to fight illegal immigration (to be partly financed by a small fee on border crossings.) An extra $3bn will go to fight crime, and an additional $25bn to improve military readiness. Overall defence expenditure is $258bn, less than 3 per cent down on fiscal 1995.
The budget is most notable for what it does not touch, in particular the huge "entitlement" programmes of social security and Medicare, providing health care for the elderly.
Taking aim at the balanced budget lobby, the documents foresee annual deficits of around $200bn until the end of the century. By then, Mr Clinton boasted, he would have cut the deficit by a total of $600bn, more than any other administration in US history.
"All my proposals are paid for by specific cuts," Mr Clinton said in a dig at the Republicans' promise of a $200bn middle-class tax cut - more than three times greater than he is offering. "Anyone can pass a tax cut; the hard part is paying for them. Americans are entitled to know what's going to be facing them."
The White House calculates that to achieve a balanced budget, as stipulated by the constitutional amendment which sailed through the House but faces a far tougher battle in the Senate, no less than $1,200bn of cuts will be needed over seven years. This, it argues, is vir- tually impossible if social security, defence and Medicare spending are to be left intact, as Republicans say they will be.
Yesterday's budget therefore is a deliberate attempt by Mr Clinton to place the political onus on the Republicans themselves. Newt Gingrich, the Speaker, has indicated the House and Senate majorities will produce their own more ambitious proposals withintwo months. But already the party's once monolithic ranks are fraying, as pragmatists and ideologues argue over how quickly change should be implemented.
In line with most government and independent forecasts, the budget predicts a decline in GDP growth this year to 2.4 per cent from 4 per cent in 1994, and a small rise in inflation from 2.6 to 3.2 per cent.
Justin Bieber was one of the hardest hit
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
£7 - £8 per hour: Recruitment Genius: An opportunity has arisen for two indivi...
£20000 per annum: Ashdown Group: A highly reputable business is looking to rec...
£28000 per annum: Recruitment Genius: This company is a major supplier of buil...
£28000 - £40000 per annum: Recruitment Genius: This is an exciting opportunity...