Clinton challenge on budget cuts

President Bill Clinton yesterday presented a draft 1996 budget projecting spending of $1,610bn (£1,032bn) and a virtually unchanged deficit of $197bn - and then challenged his Republican opponents to spell out the far deeper cuts they have promised, to meet their goal of a balanced budget by 2002. The centrepiece of the proposals launched at an elaborate White House press conference is a $63bn package of tax credits aimed at the middle class, coupled with $144bn of spending cuts over the same five-year period, geared to Mr Clinton's pledge of a "leaner but not meaner" federal government.

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.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
A 1930 image of the Karl Albrecht Spiritousen and Lebensmittel shop, Essen. The shop was opened by Karl and Theo Albrecht’s mother; the brothers later founded Aldi
people
News
Lane Del Rey performing on the Pyramid Stage at Glastonbury 2014
people... but none of them helped me get a record deal, insists Lana Del Rey
Life and Style
fashion Designs are part of feminist art project by a British student
Arts and Entertainment
Dwayne 'The Rock' Johnson stars in Hercules
filmReview: The Rock is a muscular Davy Crockett in this preposterous film, says Geoffrey Macnab
News
i100
Arts and Entertainment
British author Howard Jacobson has been long-listed for the Man Booker Prize
books
Life and Style
tech
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmA cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Sport
Louis van Gaal watches over Nani
transfers
Arts and Entertainment
Flora Spencer-Longhurst as Lavinia, William Houston as Titus Andronicus and Dyfan Dwyfor as Lucius
theatreThe Shakespeare play that proved too much for more than 100 people
News
exclusivePunk icon Viv Albertine on Sid Vicious, complacent white men, and why free love led to rape
Sport
New Real Madrid signing James Rodríguez with club president Florentino Perez
transfersColombian World Cup star completes £63m move to Spain
Arts and Entertainment
Stir crazy: Noel Fielding in 'Luxury Comedy 2: Tales from Painted Hawaii'
comedyAs ‘Luxury Comedy’ returns, Noel Fielding on why mainstream success scares him and what the future holds for 'The Boosh'
Life and Style
Flow chart: Karl Landsteiner discovered blood types in 1900, yet scientists have still not come up with an explanation for their existence
lifeAll of us have one. Yet even now, it’s a matter of debate what they’re for
Arts and Entertainment
'Weird Al' Yankovic, or Alfred Matthew, at the 2014 Los Angeles Film Festival Screening of
musicHis latest video is an ode to good grammar. But what do our experts think he’s missed out?
Travel
Hotel Tour d’Auvergne in Paris launches pay-what-you-want
travelIt seems fraught with financial risk, but the policy has its benefits
Arts and Entertainment
booksThe best children's books for this summer
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Systems Analyst (Technical, UML, UI)

£30000 - £40000 Per Annum + excellent benefits: Clearwater People Solutions Lt...

Senior Private Client Solicitor - Gloucestershire

Excellent Salary: Austen Lloyd: Senior Private Client Solicitor - We are makin...

Microsoft Dynamics AX Support Developer

£50000 per annum + benefits: Progressive Recruitment: A unique and rare opport...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Day In a Page

Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn