House Speaker-apparent Bob Livingston, R-La., has vowed that the first bill he will introduce in the 106th Congress will be legislation to take Social Security off-budget. This measure supposedly will get the very symbolic "H.R. 1" bill number to demonstrate how serious Congress is about protecting the program.
Livingston's plan to take Social Security off-budget plays right into Democrats' hands.
But assuming it passes, this will not be the first time that Social Security will have been taken off-budget. In fact, it will not be the second or third time either. Social Security has already been removed from the budget three times-in 1983, 1985 and 1990-so H.R. 1 will not be breaking much new ground.
Of course, no one has yet seen the bill, so it is hard to say exactly what Livingston will try to do substantively. Because of previously enacted legislation, Congress and the White House are already required to provide separate on-budget (without Social Security) and off-budget (essentially only Social Security) totals in their budget documents.
One possibility is that H.R. 1 will prohibit Social Security from being counted when the unified budget (on-budget plus off-budget) is calculated, or prevent the unified totals from being included in either the president's budget or congressional budget resolution. This means the $70 billion fiscal 1998 surplus that many have been celebrating (see Budget Battles, Nov. 4) would suddenly turn into a $29 billion deficit. The $63 billion fiscal 1999 surplus the Congressional Budget Office is currently projecting would turn into an approximately $50 billion deficit.
The reason Livingston thinks he and his Republican colleagues need H.R. 1 is that last year's unified budget surplus and the prospect that it would continue for years to come was perceived to be burning a hole in their fiscal pockets. It was just too large to be ignored, especially as a way to pay for the assumed reduction in revenues that CBO and the Office of Management and Budget would project from any tax cut Congress approved.
But because the fiscal 1998 unified budget surplus was the result of a $29 billion on-budget deficit and a $99 billion off-budget surplus, Republicans were heavily criticized by Democrats for proposing to use the Social Security trust fund to pay for a tax cut. Although in reality no Social Security dollars were ever going to actually be spent on anything else, in today's sound-bite world that perception proved to be very difficult to change.
Livingston's answer is to remove Social Security from the budget again, thereby eliminating the charge that Republicans somehow do not support the program as completely as Democrats do.
But there is one other thing that Livingston needs to consider politically-H.R. 1 plays directly into the hands of Bill Clinton and Hill Democrats. It will make it much, much harder for Republicans to maintain their majorities in the House and Senate and win the White House in 2000.
President Clinton announced during last year's State of the Union address that nothing should be done with the unified budget surplus until a plan that guaranteed the financial viability of Social Security was developed. He effectively was saying that anyone who proposed to do anything with the surplus would be endangering Social Security. The long faces on Republican representatives and senators immediately after the address showed that the president had indeed poured ice water on what at the time was an increasingly heated demand for a tax cut. Although the temperature of that demand increased and decreased at various times through the year, the administration's continually reaffirmed policy essentially made it impossible for the tax cut to be approved by putting the surplus out-of-bounds.
H.R. 1 will do the same thing-the surplus will become unusable. It will be a statutory change rather than an often-stated policy, but the result will be the same: there will be no tax cut.
Because of this, it will not be surprising if a number of Republicans ultimately oppose H.R. 1. While it may remove Social Security as a problem, it will also make it impossible for them to push their main issue-a large tax cut before the next election. According to American Enterprise Institute congressional expert Norman Ornstein, this could be a recipe for election disaster. Republicans will have to compete with Democrats either by supporting more spending or by pushing for more spending cuts. If they do the former, Republicans will continue to anger the base that started to abandon them this past election. And if they do the latter, they will lose much of the ability to attract voter interest from the moderates they need to maintain control of Congress and gain the White House.
This is not to say there will not be substantial support for H.R. 1. To the contrary, a number of groups-most notably the Concord Coalition and The Business Roundtable-have been insisting for some time that there is no surplus until it exists without counting Social Security, and these organizations can be expected to push hard for its adoption. And if H.R. 1 gets to the floor, so many Democrats and Republicans can be expected to vote yes that it almost certainly will pass overwhelmingly.
But if Republicans start to think through the full political implications of the Livingston plan, they may conclude that it's better just to propose it than actually to have it pass. If so, H.R. 1 just might become the first bill killed in the 106th Congress.
Question Of The Week
Last Week's Question. Lots of responses to last week's question, which asked you to explain why, even though he was re-elected to another term and the Republicans maintained control of the House, Rep. John Kasich, R-Ohio, might have to give up his post as chairman of the budget committee. Many people incorrectly suggested that Kasich might resign to run for president. The two "I Won A Budget Battle" T-shirts go to Ed Lorenzen of Rep. Charles Stenholm's office and Nancy Van Houten of Merrill Lynch, who were the first to respond with the correct answer that House and Republican Caucus rules limit the number of terms a member can serve as budget committee chair.
An additional T-shirt goes to George Krumbhaar, managing editor of USBudget.com, who correctly pointed out that Livingston announced his support for a waiver of that rule a day or so after Kasich let it be known that he was supporting Livingston in his quest to become speaker. Special Note: This is Ed Lorenzen's second T-shirt. He last won back on Jan. 13 so the Blum Rule, which prohibits two wins within any six-month period, does not apply.
This Week's Question. Here's a question that is appropriate as the 106th Congress begins to organize this week. How will the ratio of Democrats to Republicans on the Senate Budget Committee be affected by the election results? Depending on where you live, the first correct answer to scollender@njdc.com gets an "I Won A Budget Battle" T-shirt to wear while raking leaves or shoveling snow.
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