One of the biggest budget issues raised by the White House and congressional Republicans this past year was the importance of having a federal budget surplus that did not include Social Security. The matter got so heated that GOP leaders took to the airwaves to proclaim in ads and on talk shows that for the first time in decades, they had succeeded at stopping Washington from "dipping into" (their term) the Social Security trust fund to pay for other programs.
However, according to a report issued last week by the Congressional Budget Office, the reality is quite different. Not only does the fiscal 2000 budget "dip" into the Social Security trust fund, it actually does so to a far greater extent than in the previous year. So not only did Republicans make no progress toward their stated goal, but Congress' own analysts show they actually went in the opposite direction.
In other words, by the standards congressional Republicans themselves established for the budget debate, they failed.
According to the final numbers provided in late October by the Treasury Department, fiscal 1999 showed a total budget surplus of $124 billion and an on-budget (not including Social Security) deficit of $1 billion. Put another way, Social Security kept the budget in the black. To Congress' way of thinking, this means that $1 billion of Social Security money was spent on other programs.
The report issued last Thursday by CBO about fiscal 2000 (The Budget for Fiscal Year 2000: An End-of-Session Summary) estimated that the legislation passed by Congress "has reduced the projected surplus by $32 billion" compared to the estimates CBO made in July. Because the July numbers showed a $14.4 billion on-budget surplus, when the president signs all of the legislation the net impact of what Congress passed will be an on-budget deficit of $17.4 billion.
To be fair, the report said that because its estimates of spending will be lower than the ones CBO used, the Office of Management and Budget is likely to project the on-budget surplus in fiscal 2000 for which Congress is so anxious to take credit. Furthermore, many are hoping that a better-than-expected economy will allow CBO to increase the fiscal 2000 on-budget surplus by enough to overcome the current $17.4 billion deficit when CBO revises its baseline in January.
In the meantime, however, it has to be considered one of the ultimate ironies of this year's debate that the Republican congressional leadership must either rely on the Clinton administration's budget estimates or hope that the economy continues to grow in an election year (with a Democrat in the White House taking the credit) to get them out of what otherwise will be a difficult self-imposed political problem.
It is unclear, however, whether any of this will be replayed during the fiscal 2001 budget debate. Although the Social Security surplus issue was fairly potent immediately after it was raised this year, it faded as the debate continued. In addition, later polls showed that, regardless of Republican claims to the contrary, the public tended to think that Democrats were more likely to protect Social Security.
There is also a big question about the ultimate political impact of the fiscal 1999 and 2000 results. Will it be wise for Republicans to make the Social Security surplus an issue again when they themselves failed to live up to what they promised? How will they be able to blame congressional Democrats for dipping into the Social Security surplus when it was the Republican leadership that negotiated with the White House to do it?
Perhaps it just be better to let the issue fade and try to come up with something else.
The Early Returns
As of today, Rep. John Tanner, D-Tenn., leads in the balloting to be chosen as the person or organization who made the most positive contribution to this year's federal budget debate. As chosen by readers of "Budget Battles," the five nominees, in order of the number of votes they have received so far, are Tanner; Rep. Tom Coburn, R-Okla.; Federal Reserve Chairman Alan Greenspan; the Congressional Budget Office; and House Speaker Dennis Hastert, R-Ill. Votes will be accepted only until Dec. 15, so if you have not yet made your choice, do it now by clicking here. The winner will be announced in the final "Budget Battles" of 1999.
Question Of The Week
Last Week's Question. As you might imagine, last week's question (which asked for a federal budget-related holiday song) prompted lots of variations on "All I Want for Christmas is..." The "I Won A Budget Battle" T-shirt, however, goes to previous winner Reid Edwards of the Lawrence Livermore Laboratory in Berkeley, Calif., for his entry about the surplus: "Let it grow, let it grow, let it grow."
This Week's Question. It's time for "Budget Battles" readers to jump on the millennium bandwagon and show their history prowess, or maybe just their irreverence. The question: What event over the past 1000 years has had the most positive impact on the federal budget?
Take your best shot. Was it the birth of Shakespeare? How about the Beatles' first appearance on Ed Sullivan? Or was it the invention of... well, you get the picture. Send your entry to scollender@njdc.com by the close of business on Sunday, Dec. 12, and you might win your own "I Won A Budget Battle" T-shirt to impress your friends at your office holiday party.
Some unfinished business from the week of Nov. 16. The question was: Including everything labeled as "emergency spending," how far over the fiscal 2000 cap will the Congressional Budget Office estimate that outlays will be? Based on the final sequester report CBO released last Thursday, we now know that the answer is $16.6 billion. In the holiday spirit, "I Won A Budget Battle" T-shirts will be going to two people-Jeremy Sharp, who works in the Washington office of Sen. Evan Bayh, D-Ind., for his guess of $19 billion; and Frances Nam of the Department of Justice, for a guess of $14.7 billion.