NCPA - National Center for Policy Analysis


May 6, 1997

Some budget analysts are wondering why Republican leaders are so proud of the budget compromise reached with the White House. They are pointing to what they see as serious flaws in the agreement.

Among the defects:

  • Billions of dollars in new federal spending programs over the next five years are included -- a signal that big government has been salvaged -- and any "savings" would only come long after Clinton leaves office.
  • Wasteful programs which could have been eliminated are slated to grow by about 5 percent a year -- with an extra $60 billion to $70 billion in domestic discretionary spending included over five years.
  • The $115 billion in Medicare "savings" -- which are actually reductions in baseline estimates -- will probably come mainly from higher premiums and price controls on doctors and hospitals.
  • When various factors are taken into account, tax cuts will probably amount to no more than $70 billion over five years, out of an $8 trillion revenue base -- less than one-third the amount of Clinton's 1993 tax hike.

A number of analysts contend that Republicans have abandoned their promise to hold the line on spending and deliver a meaningful tax cut.

Source: Stephen Moore (Cato Institute), "The Budget Deal: All Clintonites Now," Investor's Business Daily, May 6, 1997.


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