Budget Battle Heats Up as CBO Certifies GOP Plan

Strategic Insights -

The Congressional Budget Office's certification of the Republican budget plan has given Senate Republicans a boost, with leaders saying it will eliminate annual federal deficits by 2002 and provide a dividend to pay for tax cuts. The plan, however, has been met with resistance from Democrats, who argue that it would cut essential programs and increase the national debt.

Key Takeaways:

  • The Republican budget plan would eliminate annual federal deficits by 2002, producing a small budget surplus of about $10 billion in 2002, according to the Congressional Budget Office.
  • The plan would yield a $170 billion fiscal dividend that could be used for tax cuts, and Republicans claim that their tax cuts would be paid for by the budget dividend and spending cuts.
  • Democrats argue that the plan would cut essential programs, including Medicare, Medicaid, tax credits for the poor, and welfare and food stamp programs, by a total of $270 billion.
  • The plan would add about $1 trillion to the national debt, according to a published report quoting Republican analysts.
  • The Senate Budget Committee could pull together a massive budget reconciliation bill containing cuts in entitlement programs and taxes by Friday and pass it to the full Senate next week.
  • President Clinton plans to veto any GOP budget plan that contains $270 billion in Medicare cuts.

Statistics:

  • The Republican budget plan would eliminate annual federal deficits by 2002.
  • The plan would yield a small budget surplus of about $10 billion in 2002.
  • The plan would yield a $170 billion fiscal dividend that could be used for tax cuts.
  • The plan would cut essential programs by a total of $270 billion.
  • The plan would add about $1 trillion to the national debt.
  • The national debt currently stands at $4.9 trillion.

Sources:

  • Congressional Budget Office
  • Senate GOP leader Bob Dole
  • Senate Budget Committee Chairman Pete Domenici
  • President Clinton
  • White House's Office of Management and Budget
  • Senate Democratic leader Tom Daschle
  • House Democratic leader Richard Gephardt
  • Sen. John Breaux
  • A published report quoting Republican analysts.