Doubts emerge over US 'balanced budget'

Chorus of criticism dampens initial euphoria. Mary Dejevsky reports
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The Independent Online
When President Clinton and Republican leaders reached their eleventh hour agreement on a budget plan late last week, there was prime-time televised euphoria on both sides.

Mr Clinton broke into a visit to Baltimore to rehearse the benefits of the deal to the media, while Newt Gingrich, Republican Speaker of the House of Representatives, and Trent Lott, the Senate majority leader, beamed and enthused their way through a special press conference at the Capitol.

For Mr Clinton, the chief victory lay in salvaging the Democrats' promised spending plans, including his own election promise to extend medical insurance to the country's 5 million uninsured children. Mr Gingrich's chief claim was to have "completed" his Contract for America - the government-cutting, tax-cutting agenda on which the Republicans took control of Congress three years ago. For Mr Lott, the key was to have reached the objective of a balanced budget "by cutting spending not by raising taxes".

Less than a week later, however, the five-year deal to balance the budget for the first time in three decades is looking considerably less substantial than it did at the outset.

There is criticism from the tax-cutting right of the Republican party, hesitation from sections of the Democratic left and a general public scepticism about the feasibility of balancing the budget at all. One poll over the weekend had fewer than 20 per cent agreeing with the proposition that the deficit would be eliminated by 2002.

Some of the most qualified criticism has come from Republican Senator, Phil Gramm, a disappointed tax-cutter who has been filling the airwaves to denounce the agreement. Likening himself variously to "a skunk at the garden party" or "Horatius keeping the bridge", Mr Gramm warns that the terms of the deal may raise the deficit rather than cutting it.

While Mr Clinton has spoken of "steadily declining deficits" over the five years of the agreement, Mr Gramm and his allies ask: "What five-year agreement?" What price the continuation of the agreement if the Democrats win a majority in the House of Representatives next year, or after the next presidential election in 2000? They claim that the deal is "backloaded", so that the spending increases are concentrated in the next two years, while the tax-cutting provisions are concentrated in the last two years.

If the economics of the balanced budget by 2002 may be questionable, the politics are not. As constructed, the deal allows Mr Clinton to banish the popular image of the Democrats as an irresponsible party of spending, while allowing the Republicans to shed their image of heartlessness.

As one right-wing commentator said ruefully, the "balanced budget" deal was one that neither party could have steered through Congress alone - but with Mr Clinton and Republican leaders acting together, it was almost certain to be passed - even though the details have yet to be hammered out.

In the conciliatory tone of one who recognises a political victory when he sees one, the White House spokesman, Mike McCurry, said of the deal: "We can't govern in an environment in which the Democrats, who are a minority in the Congress, can get everything they want."

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