Dems Split on Budget

House Minority Leader Richard Gephardt, D-Mo., and moderate House Democrats again are clashing--this time over President Clinton's call for a balanced budget in fiscal 1999.

Members of the New Democratic Coalition late Monday praised Clinton's decision to submit a balanced budget for FY99, while a Gephardt aide today said the minority leader is concerned that a "misplaced emphasis" on mathematical balance could cause Congress to ignore needed investments. Gephardt and some of his more conservative colleagues bickered late last year after Gephardt criticized the so-called New Democrats for neglecting traditional party values.

"A balanced budget must continue to be our top priority," Rep. Tim Roemer, D-Ind., a co-founder of the New Democratic Coalition, said in a statement, adding that "It is important that Congress follow up on the president's lead by passing a balanced budget."

Democratic Reps. Calvin Dooley of California and James Moran of Virginia, who also co-founded the coalition, echoed those comments and criticized House Ways and Means Chairman Archer for emphasizing the need for a tax cut.

While a Gephardt aide said the minority leader believes it would be "great" for the budget to be balanced while Clinton is still in office, he also believes it is more important to continue to make investments that keep the economy growing than it is to achieve balance by FY99.

An aide to Senate Minority Leader Tom Daschle, D-S.D., said he is "supportive of the president's proposal" to balance the budget next year.

Meanwhile, House Speaker Newt Gingrich is again pushing the need for a tax cut in addition to a balanced budget. In a letter Monday, Gingrich praised Clinton for his proposal to balance the budget in FY99, but also said reducing the tax burden is "critical" to continued economic expansion. He said a tax cut could be paid for by addressing waste and fraud, saying that correcting the 21-percent error rate in the Earned Income Tax Credit would raise $5.3 billion--enough to eliminate inheritance taxes.

In addition, Gingrich said the administration estimates the Medicare program loses $23 billion a year in error and fraud--an amount sufficient to eliminate the marriage penalty. He also urged the president to help Republicans identify inefficient government programs. "By doing this, we would be able to both balance the budget by the accelerated deadline of 1999 and, more important, provide tremendous savings that can be returned to the American taxpayer," Gingrich wrote.

In a related development, Senate Budget ranking member Frank Lautenberg, D-N.J., today released new Congressional Budget Office budget estimates that show only a $2 billion deficit in FY99, after a $5 billion deficit in the current FY98. Clinton Monday cited Office of Management and Budget estimates of a deficit less than $22 billion for FY98 in announcing he would submit a balanced budget for FY99.