Ferderal Funding
...mer price index to reality. Democrats say the GOP plan is too lopsided, and Republicans criticize the Democrat plan for being unrealistic. A study by the Urban Institute shows GOP cuts will be felt mainly by the bottom 1/5 of U.S. population. This should be more equally spread out across income brackets (Hosansky 1449). The GOP plan: By fulfilling campaign promises made by freshman Republican Congressmen to cut government spending, the GOP managed to pass a $1.6 trillion budget resolution by a party-line vote, in both houses of Congress (Hosansky 1450). This budget called for major cuts in education, environmental programs, discretionary spending, and the largest of all: entitlements. 70% of the money to balance the budget under the GOP plan would have come from entitlements. This is because entitlement programs currently take up $301 billion a year. Such cuts had already been partially implemented with the GOP cutting overall spending by 9.1% in 1996 alone. First, in an attempt to stop the projected bankruptcy of Medicare in 2002, Republicans cut $270 billion overall from the program, with hospital reimbursement cuts being the deepest (Hager 1283). Although stabilizing the fund is only expected to cost $130-$150 billion over 7 years, the GOP budget would reform the program to run better, and cheaper, by allowing it to grow at 6% yearly, instead of the current 10%. While both parties agree on premium hikes for beneficiaries, this is a touchy subject for the 38.1 Million elderly voters on Medicare in 1996 (Rubin 1221). Medicaid, another volatile program, would be cut $182 billion under the GOP proposal. This would entail placing a cap on the program's spending, and passing control of it to the individual state governments. For an estimated 39 million low-income people on Medicaid in 1996, the GOP plan cuts the program far more than Clinton's proposed $98 billion cut. Social Security is another program being cut. The government has already reduced the outlay for seniors 70 and younger who are on the program, but Republicans want more by increasing the eligibility for Social Security from 62 to 65 for early retirement, and 65 to 70 for standard retirement (Henderson 60). Smaller cuts included $11 billion in student loan reductions, $9.3 billion in labor cuts, $10 billion eliminated from public housing programs, and several other numerous disaster relief programs cut (Rubin 1222). The GOP also wants to eliminate programs initiated by Clinton like the National Service initiative, summer jobs, Goals 2000, and Americorps. Also, by terminating unnecessary farm programs, and cutting others by $12.3 billion, Republicans hope to cut the yearly $6 billion that the Federal Government spends on direct subsidies to farmers. Agricultural policies were also reformed and embedded into budget-reconciliation bills (Hosansky 3730). Clinton's Budget: Clinton's budget only surfaced after he vetoed the budget passed by Congress, and included shallower cuts, with little or no reform to entitlements. This plan was supported by most Democrats and was used as an alternate to a gutsy GOP budget. Clinton repeatedly trashed the Republican's efforts to make cuts on programs he feels important like student loans, agricultural programs, and entitlements. He accused Republicans of wanting to kill some all together. He has also threatened to veto a Republican plan to reform Medicare called Medical Savings Accounts, unless his programs are left intact (Hager 752). Under Federal law, the President is required to submit budget requests in 2 forms: Budget Authority (BA), the amount of new federal commitments for each fiscal year, and Outlays, the amount actually spent in the fiscal year (Rubin 1221). The plan that Clinton has presented is not only a budget resolution in the form of a campaign document, but also proof of how far the Republicans have moved him to compromise since the they took control of Congress. Most important, it does not readily translate into regular accounting principles used for government programming. This year's White House budget was a 2,196 page document that the GOP struck down immediately for not cutting taxes enough and neglecting to downsize the government (Hagar 752). There is little or no change at all in this budget, said Pete Domenici (Senate Budget Committee Chairman), talking of Clinton's new budget. Among largest cuts within Clinton's plan was the downsizing of 1/5 to 1/3 of all programs that he felt were not a priority to present day government. In addition, he wanted to close loopholes presented to corporate taxation, that would save an estimated $28 billion. He vowed to keep programs like education, crime prevention, and research or environmental grants, while increasing the Pell Grant from $2,340 to $2,700. Attention was also placed on discretionary spending, with Clinton cutting a smaller $297 billion compared to GOP's $394 billion cut. According to the Office of Management and Budget, the President's plan cuts middle-income taxes by $107.5 billion in 7 years, small business by $7 billion, and cuts $3.4 billion from distressed urban and rural area relief (Rubin 1222). This was to be paid for by a $54.3 billion hike in corporate and wealthy-income taxes, and also in $2.3 billion of tighter EITC (Earned Income Tax Credit) adjustments. Although Clinton's plan was expected to cut a whopping $593 billion in 7 years to furthermore produce an $8 billion surplus in 2002, most cuts are long term without a clear goal. Clinton is sometimes criticized by Republicans for unwillingness to compromise. He has used vetoes and stubborn negotiations to protect personal priorities like education, job training, and environmental programs, but Republicans have also tried using domination to force him to comply. GOP Presidential candidate Bob Dole said if Clinton was serious about the budget, we probably could have had an agreement on New Years Day, 1996 (Hosansky 1449). The President is sitting on his hands while the federal debt keeps going up and up and up into the stratosphere, said Congressman Jesse Helms, Rep -North Carolina. But one must remember that President Clinton does have somewhat of an overwhelming power in this debate that Republicans can do nothing about. He is the single person that can veto laws sent to him, and also has the power to call Congress back into session if he is unhappy with the current situation. This was President Truman's ace in the hole back in 1948. A Neutral Proposal: As a neutral proposal, a group calling themselves the Blue Dog's have won support for their budget from both Republicans and Democrats. The group also known as the Concord Coalition includes many conservative Democrats that want to see shallower budget cuts with less reform to entitlements. They also believe a tax cut should be delayed until the budget is balanced. The Coalition believes that by reforming entitlement policy, rethinking government size, changing taxati...