Clinton's Budget Exceeds Spending Limits, Alters Congressional Estimates

President Bill Clinton's budget for 2000 would exceed statutory spending limits by $30bn, challenging the 1997 balanced-budget agreement between Congress and the White House. The Congressional Budget Office (CBO) found that the president's budget would also leave surpluses $73bn smaller than claimed over the next five years. The CBO's director, Dan Crippen, testified before the Senate Budget Committee, explaining that the agency's revised estimates were due in part to the president's use of impermissible revenue-raisers, such as increasing taxes to fund discretionary spending.

Key Takeaways:

• The Clinton administration's budget for 2000 would exceed statutory spending limits by $30bn, breaking through the 1997 balanced-budget agreement.
• The CBO estimates that the president's budget would leave surpluses $73bn smaller than claimed over the next five years.
• Dan Crippen, the CBO director, testified that the agency's revised estimates were due to the president's use of impermissible revenue-raisers, such as increasing taxes to fund discretionary spending.
• Crippen stated that tax increases can only pay for corresponding tax breaks, not discretionary spending.
• Clinton and Vice President Al Gore rallied with Democratic legislators to support their fiscal priorities, including using three-quarters of expected budget surpluses to buttress Social Security and Medicare.
• Republicans sought to stir up support for cutting taxes, while also considering legislation to strengthen the case of patients dealing with managed health care companies.
• The administration's budget proposes a $1,800bn spending plan, which Republicans argue spends more and saves less than claimed.

Statistics:

• The Clinton administration's budget would exceed statutory spending limits by $30bn.
• The CBO estimates that the president's budget would leave surpluses $73bn smaller than claimed over the next five years.
• The 1997 balanced-budget agreement established spending caps for the federal government.
• Three-quarters of expected budget surpluses would be used to buttress Social Security and Medicare, according to the Clinton administration's plan.
• The administration's budget proposes a $1,800bn spending plan.

Sources:

• Congressional Budget Office (CBO)
• Financial Times Limited, 1999.
• Senate Budget Committee
• President Bill Clinton's State of the Union speech, January 1999.
• Copyright Financial Times Limited 1999. All Rights Reserved.