The CBO will report later today that the Clinton administration fiscal 1998 budget plan would result in a $69 billion deficit in 2002, key sources said today. The budget office also will report that the FY98 deficit would be $145 billion, up from $112 billion in FY97, the sources said.
In one of the more contentious issues, the CBO also will estimate that the Clinton administration's Medicare reforms would result in less than $90 billion in savings by 2002. CBO Director June O'Neill recently estimated the Clinton budget would be at least $50 billion out of balance in 2002, because the administration and the CBO are using different economic assumptions.
The administration anticipated that possibility and included in its budget a plan to phase out tax cuts and boost spending cuts if its deficit targets are not met. But a source familiar with the CBO figures said the size of the FY2002 deficit makes use of those triggers even more difficult.
Speaking to the Association of Advanced Life Underwriters, House Budget Chairman John Kasich, R-Ohio, said today that President Clinton's budget will be "almost $70 billion" over budget by its target date of 2002, in what he called a "vain attempt to balance the budget." Kasich said "it wouldn't surprise me if we asked him to send us another one that would balance."
But Senate Majority Leader Trent Lott, R-Miss., who said the CBO would score Clinton's budget as "$69 billion" out of balance, said he does not think Clinton will submit either a new budget or tax proposals, which also were found lacking last week by the Joint Committee on Taxation. "I think he should. I haven't seen any indication they are willing to do that," he said.
But Lott told the National Association of Counties of he will not cancel the task forces set up by Clinton and Congress in January or budget talks. "I'm not prepared to start off by threatening to cut off the talks," he said, adding some of those task forces will begin meeting this week.
White House Press Secretary Michael McCurry confirmed Lott's suspicions, saying today that Clinton will not heed GOP calls to resubmit his tax cut proposals. "It's not going to happen. Let's move on with the regular process," McCurry said.
House Ways and Means Chairman Archer is leading the charge for Clinton to resubmit his plan, based on the fact that the JCT estimated many of Clinton's tax proposals would expire at the end of 2000. But White House officials said they wrote their proposals in such a way because they were instructed to do so by the CBO or else the CBO could not score the plan as achieving balance in 2002.
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