Budget groups warn Congress surplus not guaranteed

With a Medicare prescription drug benefit quickly becoming a political given, an $864 billion tax cut package reported out of the House Ways and Means Committee and the Senate Finance Committee marking up a $792 billion bill this week, The Concord Coalition and the liberal Center on Budget and Policy Priorities last week cautioned Congress not to spend a surplus that may not materialize.

"Dare to do nothing," Concord's Robert Bixby said. "Once there is a new tax cut, once there is a new entitlement created ... you're locked into it," even if the CBO's surplus projections do not pan out.

Earlier this month, the Congressional Budget Office released a revised budget forecast that projects a budget surplus excluding Social Security of $14 billion next year and $996 billion over 10 years.

Nevertheless, CBO Senior Budget Analyst Susan Tanaka said, "The $14 billion for next year is already gone. We're already projecting a $3 billion on-budget deficit."

Tanaka pointed out that the CBO's numbers differ from those used in the congressional budget resolution in three crucial ways that-if brought in line with congressional numbers-would mean a $3 billion deficit next year.

But both Concord and the Center emphasize that many of the assumptions that underlie those projections are unlikely to hold true even for fiscal 2000, much less over a decade. In particular, they point to the assumption Congress will stick to the stringent discretionary spending caps in place through 2002 and make the politically unpopular spending cuts necessary to do so.

Other assumptions the two groups question are that Medicare health benefit costs will grow at a relatively slow rate and that the entire surplus will be used to reduce the nation's publicly held debt-thereby increasing the surplus number by reducing the interest on the debt the government must pay.