BETWEEN THE LINES: Clinton Budget Cuts Social Investment Programs to Historic Lows

President Clinton's federal budget, submitted to Congress on Feb. 7, proposes to add prescription drug coverage to the Medicare program and extend health insurance to low-income working parents and their children. But under the White House plan, most of the projected budget surplus would be directed toward shoring up Social Security and retiring the national debt. In fact, the Clinton budget, if approved, would see government expenditures decrease as a percentage of the economy to the lowest levels since the 1950s, as reported by the Center on Budget and Policy Priorities in Washington, D.C.While the U.S. economy continues to do well in a record-breaking period of expansion, some portions of the discretionary budget that support social programs such as Head Start, low-income housing and environmental protection, will actually lose funding under both the White House and Republican plans.Between The Lines' Scott Harris spoke with Max Sawicky, an economist with the Washington, D.C.-based Economic Policy Institute, who assesses the Clinton budget and the gulf between public opinion that supports increased social spending and the political forces that oppose it.Max Sawicky: I'd say the (Clinton) budget is not really a very ambitious one in terms of striking out and solving new problems in the domestic field. The bulk of the surplus, projected in the budget, is destined to go for repaying the debt, as it did this fiscal year we're in, which I don't think is a very good idea.I would use some of the surplus to pay off part of the debt. Since employment is as high as it is now, you can't expect to spend that entire surplus; we want to have some debt repayment. But I think there are other things the government is neglecting, things that are popular with the public. For instance, reducing school class size. There is money now to address those issues in a more serious way, and it's unfortunate we're not about to do that, apparently.Between The Lines: The budget as it stands now will actually see a decrease over time in some critical areas, such as Head Start and poultry and meat inspection -- government services that people depend on for some quite critical things.Max Sawicky: What's called discretionary spending -- that which is (set) aside from the major entitlement programs such as Social Security, Medicare, Medicaid, unemployment, etc. and things like that -- are projected to fall after adjusting for inflation. That includes the military, incidentally. It also includes most of the things people associate with government: law enforcement, environmental cleanup, agricultural programs, transportation and grants to states and local government; quite a wide variety of things. Although there's many programs within that category, they only add up to $600 billion, which is well under half the budget. So it's a smaller part of the budget, but it is a part that is associated with services the people look to government for.In the president's budget -- which we expect to be the ceiling of possibility, unfortunately, in terms of spending -- when discretionary spending is taken together, it's lower after adjusting for inflation over the decade and also, incidentally, for the coming year. So there's what I would call a stagnation in the areas of the budget from which new federal government initiatives might come to deal with things that people really think are worth addressing. The polling data shows that there's been some change of public opinion. People would like to see the government address things like health care, class size, safe schools, a variety of things of that nature. A tax cut doesn't mean much to most people. They don't see much benefit in debt repayment. The politicians, including the president and both parties' leadership, I think are both far out of step (with the public) on this stuff.Between The Lines: It seems that both within the White House and Congress and even presidential politics -- the spirit of Ronald Reagan lives on after 20 years. His notion and philosophy that government is inherently evil and government programs should be avoided at all costs seems the watchword of the day.Max Sawicky: In one sense, but not in another. When people are polled on the merits of either cutting taxes or reducing debt, those things poll very low. These things are not popular anymore.When (the public) is polled on class size, environment, health care, aid for children's nutrition, things of that nature, these things poll very well. These are mostly Democrat issues, and that's why the Democratic party is feeling very good about elections this year. The spirit of Reagan lives on, mostly I would say, in the politicians, more so than among the public.ÊWhen you look at elected officials, very few are willing to contradict the wisdom of a variety of fiscal conservatives -- (who advocate) tax cuts or debt reduction.Of course, Reagan was a great debt increaser, but he acquired the reputation of a fiscal conservative, nevertheless. Politicians have been very reluctant until now, and I guess will be for awhile yet, to diverge from one or the other of those sort of nostrums, either the merits of reducing debt or the merits of cutting taxes or some combination of those two. So, the spirit of Reagan lives on in that somewhat distorted respect.But in terms of the idea of making tax cuts and government shrinkage a major crusade, I think that's pretty well dead.

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