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CBO: Clinton Budget Would Produce $50 Billion Deficit

Gingrich predicts he has the votes for balanced budget amendment

budget

WASHINGTON (AllPolitics, Feb. 14) -- President Bill Clinton's budget proposal would result in a $49 billion dollar deficit by the year 2002, not the $17 billion surplus the White House is predicting, according to early estimates by the Congressional Budget Office.

CBO Director June O'Neill described the Clinton plan, released to Congress last week, as "an honest effort" at balancing the budget, but one that falls short when her office's economic numbers are plugged in, instead of the more optimistic White House assumptions.

White House Press Secretary Mike McCurry responded, "Well, we respectfully disagree."

In testimony before the House Budget Committee on Thursday, O'Neill said that a preliminary CBO evaluation projects a deficit of at least $49 billion, "even after giving the administration credit for every penny of savings it claims from policy reforms."

The discrepancy between the White House and CBO numbers is the result of conflicting estimates on how high the deficit will be in 2002 if nothing is done to harness its growth.

The White House says that the deficit in 2002 will be $101 billion. Therefore the $118 billion savings promised by the Clinton budget would yield a $17 billion surplus.

CBO experts, in contrast, put the deficit at $167 billion in five years. Assuming that the administration's proposed plan will save $118 billion, it still falls short of balance by $49 billion.

But further analysis of the budget plan, O'Neill warned, will "most likely" yield an even higher figure because Clinton's expected savings are probably inflated as well. "Through the years, CBO has been stingier than any administration in estimating... savings," O'Neill said.

The findings support Republican criticism that the Clinton budget is not balanced and adds fuel to the GOP fire for a balanced budget amendment. The president has opposed a permanent change to the Constitution, arguing that they can balance the budget without it.

Republican leaders in the House have put off action on the balanced budget amendment legislation until after the Senate finishes its work, fearing defections from their own ranks over the Social Security issue. But House Speaker Newt Gingrich said Thursday that he "probably" can gather up enough support for a vote.

After speaking to a senior citizens group in Arlington, Va., Gingrich was asked if he could marshall enough support in the Republican majority to hold a vote on the balanced budget amendment. Gingrich answered, "Oh, probably."

He also said that the federal budget can be balanced without affecting Social Security. "We can get to a balanced budget without touching -- without touching -- Social Security," Gingrich said.

Senate Democrats have attacked the amendment, saying it could lead to the early bankruptcy of the Social Security system. Many Democrats, and some Republicans, favor removing the Social Security Trust Fund from the budget debate.

CNN's Marty Kramer and Brad Wright contributed to this report.


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