House GOP Offers $9 Billion in Health, Education Cuts

WASHINGTON —  House GOP leaders, struggling to avoid having to use part of the Social Security trust fund to finance government programs, proposed $9 billion worth of cuts in health and education programs Wednesday to offset spending increases in defense and other areas.

The package, hammered out by House Majority Whip Tom DeLay (R-Texas), is to be offered as a series of amendments to the money bill for the departments of Labor and Health and Human Services, scheduled to be considered today by the House Appropriations Committee.

By far the biggest saving--$8.7 billion, according to GOP estimates--would come from a plan to change the method of providing cash outlays to the poor under the Earned Income Tax Credit to a month-by-month payment instead of sending out lump-sum checks midyear.

Republicans also hope to save $200 million by ending cash payments to workers who lose their jobs because of foreign competition and $100 million more by imposing a fee--adopted by Congress years ago, but never collected--to defray administrative costs on some student loans.

Democrats charge that the proposal to change the payment schedule for recipients of the Earned Income Tax Credit would effectively delay a portion of the annual cash payment, which often is urgently needed by working poor families.

Treasury Secretary Lawrence Summers said that the move, in effect, would amount to a tax increase on “up to 20 million working families.” He pointed out that the tax credit is intended as an incentive to prod needy people to get off welfare and get jobs.

Republicans are scrambling to cut the total they have appropriated for all programs to avoid having to siphon off part of the surplus in the Social Security trust fund--a move that would break one of the promises they made to voters earlier this year.

In the 12 money bills they have passed so far, lawmakers have boosted defense outlays--and spending for transportation and airport construction--so much that they have breached the spending limits Congress set in 1997 and are on the brink of tapping the Social Security fund.

Republican calculations show that unless the new offsetting spending cuts are approved, the House will be forced to use $8.6 billion from the $30-billion Social Security surplus now being projected for fiscal year 2000. The offsets ostensibly would make that unnecessary.

Indeed, House Republican leaders reiterated that pledge Wednesday, calling a news conference to reaffirm their intention to keep the Social Security fund inviolate, despite their budgetary problems.

Although both Republican and Democratic congresses have used excess Social Security money to finance ordinary government operations for years, GOP leaders have promised repeatedly to leave the trust fund intact, challenging President Clinton to do the same.

The federal budget comprises two major categories--the day-to-day operating budget and the Social Security Trust Fund. When the government does not have enough revenue to finance its operating budget, it traditionally “borrows” from the trust fund, using surplus money from the fund and replacing it with special bonds that Social Security authorities can redeem later.

Outside budget analysts said that the GOP figures are optimistic and predicted that Republicans cannot keep their promise. The nonpartisan Congressional Budget Office has predicted that the Social Security trust fund could be tapped for up to $24.1 billion.

Moreover, it still is not certain whether the new GOP-proposed spending cuts will win approval in the Appropriations Committee, where Democrats are likely to oppose them. The bill also may face other challenges over social issues, such as possible anti-abortion amendments.

Democrats have charged that Republicans already have failed to keep two companion promises--to pass all their annual appropriations bills on time and to keep spending within the category-by-category budget ceilings, known as caps, that Congress set in 1997.

On Tuesday, the two houses passed a stopgap spending measure, known as a continuing resolution, to keep money flowing to government departments and agencies beyond midnight today, when funding for fiscal 1999 ends. The stopgap funding will end on Oct. 21.

Although it is generally expected that the Republicans will have to negotiate with the White House to resolve the budget dispute, neither side so far has made any serious overtures.

House GOP leaders are pushing to complete work on their appropriations bills and send them to the president before agreeing to negotiations--on grounds that forcing Clinton to sign or veto them on a case-by-case basis will narrow the scope of what the two sides must negotiate.

Republicans faced other problems in their push to complete work on their appropriations bills, as mounting opposition from Democrats and conservative Republicans forced them to pull a foreign operations money bill off the floor.

The $12.6-billion measure, a compromise by a House-Senate committee that reconciled differing versions of the legislation, drew objections from Democrats because it fell $2 billion below what Clinton requested, while conservatives were angered because it contains $385 million for family planning aid.

House leaders said that they would work over the next few days to try to persuade more lawmakers to vote for the bill, but there was no word on how soon it might be rescheduled for floor action.

Meanwhile, Senate Republicans beat back a Democratic attempt to restore money in that chamber’s version of the Labor-Health and Human Services money bill for Clinton’s plan to hire 100,000 new teachers, which both the House and Senate appropriations panels eliminated.

The vote was 54 to 44, with both California senators--Democrats Dianne Feinstein and Barbara Boxer--voting for the amendment to restore the money.