Curious what the large projected surplus, strong economy, peaceful world and impending election will do to this year's budget debate? The "big" budget stories from last week offer the best clue to date.
Last week, the White House let it be known that one of President Clinton's most important fiscal 2001 budget proposals will be a new $1.3 billion program to renovate school buildings. House Republican leaders indicated that one of their key goals will be a greatly scaled-down tax cut, averaging $12 billion a year over the next 10 years. Taken together, these two trial balloons suggest that 2000 will bring a whole lot of nothing on the budget front.
This is the time of year when the White House selectively leaks the parts of its soon-to-be-released budget it thinks will get the most positive attention. These "previews" come weeks before the official budget announcement, so that the president can claim the issue as his own with key constituencies. The Clinton administration has done this masterfully over the years, so this week's story about its school building rehabilitation plan must have been a purposeful decision by the White House to trumpet what it plans to propose.
But while the story clearly allows the Clinton administration to stake out some ground on education, that stake is remarkably small. In a budget that will be close to $1.8 trillion, this new initiative will be just a tiny percentage of total spending.
In previous years, a proposal of this size would have almost gotten lost in the din of everything else that was happening on the budget. It would have been dwarfed by proposals to reduce the deficit, increase or decrease the military budget, or raise or lower taxes. For the fiscal 2001 budget, however, a new $1.3 billion program apparently takes center stage-and that says a great deal.
House Republicans, meanwhile, plan to push a much-reduced tax cut in this year's budget debate. The drop to $120 billion from the almost $800 billion, 10-year revenue reduction passed last year is no less instructive than the president's proposal.
The new plan puts the Republican majority on record as continuing to support tax cuts and so allows it to continue to stake a claim to the issue. But while the overall budget surplus is projected to grow, and Republican leaders have been saying for months that they expect the non-Social Security surplus-the one they wanted to use last year to pay for their tax cut-to be higher than previously projected, the proposed tax cut somehow is getting much smaller.
Never mind that voters rejected last year's plan in part because the tax relief that would have been provided would have been too small compared to the perceived threat of higher interest rates. Never mind that some of the most active tax-cut proponents thought the $800 billion reduction was too timid to be worth the effort. This year the House Republican leadership has decided that the fiscal 2001 tax-cut fight will be over a reduction that is just 15 percent of what they could not get enacted last year.
The fact that the first two significant proposals to leak in the fiscal 2001 budget process are so small says everything you need to know about what will unfold in the months ahead. The monumental confrontations that have typified many federal budget debates will be nowhere to be found this year. The lack of anything close to a consensus about what to do on any of the bigger long-term issues, the narrow majorities in both houses, and a U.S. economy that continues not to need any significant legislative adjustments leads to the inevitable conclusion that the fiscal 2001 budget process will have little or none of the drama of the recent past.
This means that, as both the presidential school rehabilitation and Republican tax plans indicate, whatever spending and tax changes are made as part of the budget debate are likely to be comparatively insignificant, especially in terms of their overall impact on the economy.
Question Of The Week
Last Week's Question. The question was, "Which major federal cabinet department or agency received the highest percentage increase in budget authority from fiscal 1999 to 2000?" The responses were all over the map. The correct answer is the Department of Commerce, whose appropriation (not including advanced appropriations, obligation limits, or the across-the-board cut included in the final deal that has not yet been published by the Office of Management and Budget) rose by more than 67 percent. Most of that was due to the one-time increase for the 2000 census, which was classified as an "emergency."
The winner of an all new "I Won A 2000 Budget Battle" T-shirt is Joe Moore, a weapon system point of contact with the Defense Supply Center Columbus. Joe was one of several people who picked the Commerce Department but the one who came closest to the actual percentage increase.
This Week's Question. Here's one for the history buffs among us wonks, numbers crunchers, and budget aficionados. What is the name of the act that requires the president to submit a budget to Congress each year? Send your response to scollender@njdc.com by 5 p.m. on Saturday, Jan. 15, 2000, and you could win your own "I Won A 2000 Budget Battle" T-shirt to wear while watching either the NFL play-offs or the figure skating competitions programmed opposite them. The winner will be selected by random drawing if there is more than one correct entry.
Want To Know More About The Fiscal 2001 Budget Debate?
Here's your chance to easily and enjoyably find out more about what this year's budget debate will mean for you:
Click here to receive details about "BUDGET DISCO," a half-day executive briefing on Feb. 16 in Washington, D.C., conducted by yours truly and sponsored jointly by the National Journal Group and Fleishman-Hillard. The latest in computer presentation techniques, including sound and visual effects, will make this the most fun and useful briefing you attend all year.
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