Beyond Uncle Sam's Locked Doors

GOP bill to balance budget lies at heart of Washington squabble

GOVERNMENT offices are padlocked. Voters are fuming. Democrats and Republicans are talking, uncivilly, from behind opposing lecterns.

In the history of American politics, it's hardly a Kodak moment.

But sometime today or tomorrow, congressional leaders will unveil the final version of a bill that would balance the federal budget in seven years.

Although it has been overshadowed by political nattering over temporary spending measures, and will be brusquely vetoed by the president as early as Friday, the ''reconciliation'' bill's debut will be far more telling about the future direction of the nation.

Not only is it the culmination of 10 months of legislative toil, but it also represents the official anthem of the Republican revolution, a theme song that will be parroted by GOP candidates across the land next November. It also offers a glimpse of what America might look like if Republicans ran the whole show.

''It's central,'' House speaker Newt Gingrich (R) of Georgia said of the reconciliation bill at a Monitor breakfast yesterday. ''It'll decide for a generation who we are.''

Substance Behind the Squabble

Indeed, this bill is the cornerstone of the Republican agenda. Not only does it dictate how government will spend 70 percent of its discretionary funds next year, but it also sets budget targets that will determine how much the government will spend, and save, over the next seven years.

While not technically part of this week's impasse between Congress and the president, reconciliation is the substance behind the squabble. While the two sides agree, in principle, on the need for a balanced budget, they remain far apart on how and when to arrive there. The forum for this fight is, ironically, called ''reconciliation.''

Although its provisions can be amended by any subsequent Congress, this bill has historic overtones: If carried through until 2002, it would balance the federal budget for the first time in two decades and cast many federal programs off to the states.

Clinton's gripes

So far, President Clinton is promising to veto the measure, citing ''unacceptable'' provisions on Medicare, Medicaid, child care, school-lunch programs, food stamps, child nutrition, child welfare, student loans, and tax cuts that, he says, would benefit wealthy Americans and hurt the poor. A final version of the bill might not be signed until Christmas, or some say, until after the election.

The balanced-budget bill began in June when Congress passed a budget resolution. This bill - basically an outline - set broad goals for tax revenues and entitlements like Medicare and welfare. The role of reconciliation is to marry, or ''reconcile,'' these goals with actual government spending.

This summer, the 13 House and 12 Senate committees that oversee programs contained in the reconciliation bill set to work turning those broad goals into detailed blueprints. When they were complete, Republicans in both houses wrapped them together and passed them with great fanfare last month.

Since then, a conference committee has been meeting in private to hammer out a compromise. That task, which could be completed today, has been rocky at times. Shouting has broken out during the process over two of the most sensitive issues: farm subsidies and Medicaid, on which the House and Senate widely disagree.

Although final compromises are near, Republicans insist that nothing is set in cement until the entire package is finished. As it stands now, the reconciliation bill would:

* Save $270 billion in Medicare by cutting payments to providers and raising premiums for Medicare beneficiaries who make more than $65,000. It would freeze deductibles at $100 and allow recipients to enter private health plans at government expense.

* Trim $170 billion from Medicaid by turning the program over to the states in the form of block grants. Discussions continue over whether or not states would be required to guarantee coverage for some disabled people, pregnant women, and children under 12, but the plan would retain most federal nursing home standards.

* Offer families a 50 percent cut in capital-gains taxes and a $500 per-child tax credit. Both measures would be retroactive, meaning that every American family will receive four months, or $125 worth of the child credit, and a year's worth of reduced capital-gains taxes, before the 1996 election. These and other measures will cost $245 billion.

* Reduce subsidy payments to farmers by $13.4 billion by paying farmers a set, but decreasing, subsidy that won't vary with market conditions. Farmers would have more control over what crops they choose to plant and how much land they employ. Some dairy farmers would be hit hard, sugar and peanut farmers would fare better.

* Save $81.5 billion by turning welfare over to the states. The federal government would continue to allow unwed teenage mothers to collect benefits, but would permit states to cut them off.

Families who have more children while on welfare would be denied extra funds, but states could, again, change that. Immigrants would be denied some benefits, school-lunch and nutrition programs would be cut, and child-care programs would be expanded slightly.

In addition, the bill would reduce the number of families eligible for the Earned Income Tax Credit, raise rates on student loan programs, sell many government assets, and open the Alaska National Wildlife Refuge to limited oil drilling.

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