Nearly one month after the agreement, the House has adopted the fiscal 1998 budget resolution implementing the balanced budget agreement reached by the Administration and the congressional leadership. At press time, the Senate was also expected to pass the bill, with a conference committee ready to create a resolution that both houses would adopt before the weeklong Memorial Day recess. The resolution itself is a blueprint for the authorizing and appropriations committees to follow and does not go to the president for his signature. It contains the broad parameters for spending, savings and tax cuts without many of the details. The federal budget would be balanced in the year 2002 under the agreement.
The delicate compromises in the resolution encountered a few challenges. The House narrowly defeated 216-214 an amendment offered by Bud Shuster (R-Pa.), chair of the House Transportation and Infrastructure Committee, to increase funding by $12 billion over five years for the Intermodal Surface Transportation Efficiency Act (ISTEA). The amendment would have raised the money by cutting all other programs and reducing the proposed tax cuts across the board by .4 percent. Both the Administration and Republican leadership opposed it.
Senate debate also encountered dissension when senators spent most of the day debating, and ultimately defeating by a vote of 55-45, an amendment offered by Senators Orrin Hatch (R-Utah) and Edward M. Kennedy (D-Mass.) to fund a new $20 billion child health insurance expansion. Although the budget agreement assumes $16 billion for child health expansions, Hatch and Kennedy were proposing a 43-cent per-pack increase in the cigarette tax as a revenue source. Republicans had argued that the Hatch proposal was not in the budget agreement, nor is there an agreed- upon legislative approach to the issue. The cigarette tax proposal would have reduced the budget agreement's tax cuts and increased the amount of domestic spending. The amendment was defeated when President Clinton agreed with Senate Majority Leader Trent Lott (R-Miss.) to urge that it be rejected.
While many of the details will be left to the authorizing committees, there are a few agreements NACo will be actively lobbying as they reach the committees of jurisdiction. Medicaid cuts would total nearly $14 billion over five years. These savings would slow the program's growth from the current 7.8 percent projected rate to a 6.9 percent annual rate. The disproportionate share payment program (DSH) would be the target for most of the savings. DSH provides special payments to hospitals and other health facilities serving large numbers of the poor. NACo opposes the cuts, which would easily reach double-digit percentages for county hospitals. A lobbying effort will be mounted to further target the program to ensure that county hospitals which truly serve the poor will be held harmless.
In a major victory for counties, the agreement also assumes the restoration of Medicaid and Supplemental Security Income benefits to legal immigrants who were in the country prior to the signing of the welfare reform law on Aug. 22, 1996. This $10 billion restoration also assumes that disabled legal immigrants who are on the welfare rolls before June 1, 1997 will not be denied assistance.
Transportation programs would receive slightly more money under the budget agreement, amounting to an average of $22 billion a year, still far short of the $26 billion to $32 billion wanted by Rep. Shuster. NACo is supporting Rep. Shuster's call for additional funding.
Section 8 housing would receive $35 billion over five years above the 1997 levels to renew housing contracts. This effort would maintain current occupancy rates.
Medicare is slated for $115 billion in savings, most of it from reduced payments to doctors and hospitals. These savings are expected to be fought hard by provider and aging groups.
Taxes would be cut by $85 billion over the five-year agreement, with the details to be determined by the Senate Finance and House Ways and Means committees. The tax relief would be targeted to child tax credits, estate taxes, capital gains and education credits. The president has received a letter from House Speaker Newt Gingrich (R-Ga.) and Senate Majority Leader Lott committing to a level of "roughly $35 billion" for his education tax initiatives.
Upon their return from the Memorial Day recess on June 2, the House has
set a very ambitious schedule for writing and passing in committee the detailed
bills necessary to enact the budget agreement. The Republican leadership
has set mid-June as the deadline for committees, but that schedule is likely
to slip.