NCPA - National Center for Policy Analysis

The Clinton Budget

February 7, 1997

Some analysts say that the fiscal year 1998 budget proposed by the White House avoids hard choices. Because spending will rise more slowly, federal taxes and outlays, measured as a percentage of Gross Domestic Product, are projected to fall slightly -- if the economy grows as projected.

  • For 1998, spending would increase 3.5 percent -- to $1.687 trillion.
  • Tax revenues would represent about 19.1 percent of GDP -- back to where it was before Ronald Reagan cut taxes.
  • For the period 1992 to 1998, spending is expected to fall by two percentage points of GDP -- with 1.7 points of that coming out of defense.

Critics say that the President is embarked on a course of "spend now, but promise to cut later."

  • Spending on the environment, for example, is increased by five percent -- by $1.2 billion in 1998 -- but is expected to decline by $550 million by 2002.
  • Spending on the controversial Legal Services Corp. is boosted by 20 percent.
  • The National Endowment for the Arts has its budget inflated by 37 percent.

The growth in entitlement spending is slowed by what some critics call sleight-of-hand, with the Medicare budget made more "solvent" simply by switching $80 billion in home health care spending from Part A to Part B.

The budget proposal also takes credit for reducing the federal work force by more than 250,000 and thus creating the smallest work force in 30 years. But 212,000 of those folks came out of defense and the end of the savings and loan bailout: non-defense federal employment will actually rise from 1997 to 1998.

Analysts say the hard choices are being passed on to the next president, whoever that might be.

Source: Editorial, "Let Al Do It," Wall Street Journal, February 7, 1997.


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