WORLD

Budget blues

Congress hands Bush a stinging defeat

MARY NEMETH October 15 1990
WORLD

Budget blues

Congress hands Bush a stinging defeat

MARY NEMETH October 15 1990

Budget blues

WORLD

THE UNITED STATES

Congress hands Bush a stinging defeat

Last Saturday, the national park service closed the Statue of Liberty as the U.S. administration, unable to convince re-

bellious congressmen to pass a controversial budget compromise that would have cut spending and raised taxes, lost all authority to spend money. Tourists flocking to the capital for the Columbus Day long weekend found the Washington Monument and other tourist attractions closed. And on Capitol Hill, congressmen gathered in a crisis atmosphere to hammer out a budget compromise before Tuesday morning—when the shutdown would paralyse all non-essential government services. Christopher Young, a 15-year-old boy scout who had travelled 550 km by bus from Columbus, Ohio, to spend the long weekend sightseeing, expressed exasperation. “We have come to see Washington and it’s all locked up,” said Young. “The Congress is blaming the President and the President is blaming the Congress. Nobody can agree on a budget. I'm going to tell my dad not to vote for any of them.”

By refusing to pass the budget deal, Congress delivered a stinging defeat to President George Bush—the most popular U.S. President since opinion polling began. Bush put his personal prestige on the line last Tuesday night when he appealed to Americans on national

television to urge their congressmen to pass the deficit-reduction plan. “If we fail to enact this agreement,” warned Bush, “our economy will falter, markets may tumble and recession will follow.” But, despite that plea, thousands of angry Americans called their lawmakers to complain about the deal. And just five weeks before midterm congressional elections on Nov. 6, in which all 435 seats in the House of Representatives and 35 of the Senate’s 100 seats are at stake, neither Democrats nor Republicans were in a mood for compromise. Early Friday morning, the House of Representatives voted 254 to 179 against the budget. Said conservative Republican Newt Gingrich, who led the charge against the budget: “There’s a tidal wave of anger out there against taxes.”

Late Friday, Congress passed a stopgap measure that would have funded the government for another week. But Bush, in an effort to force Congress to hammer out a compromise budget as soon as possible, vetoed the bill on Saturday. Said Bush: “The Congress has got to get on with the people’s business.”

The compromise budget plan had aimed to cut the federal deficit by $46 billion this year and $575 billion over five years. It included $154 billion in new taxes on gasoline, alcohol,

cigarettes and luxury items. And it called for more than $345 billion in spending cuts affecting defence—the current Persian Gulf operation excepted—and such popular programs as Medicare for the elderly and poor. Even with the agreement, the deficit for fiscal 1991, which began on Oct. 1, would have hit a record $292 billion. And while most congressmen agreed that the deficit had to be slashed, few were willing to vote for the cuts in the budget package. Said Democratic Representative David Obey: “The way it gets to that deficit reduction is absolutely outrageous.”

The plan to raise the tax on gasoline by 12 cents over the next two years was a major problem for Congress, especially for representatives from midwestem states. Since the Persian Gulf crisis erupted in August, consumers across the country had expressed

their outrage over price hikes at the pump. At a White House ceremony on Sept. 30 to announce the budget agreement, Bush defended the gasoline tax rise. “I do not welcome any such tax measure,” said Bush. “However, this one does have the virtue not only of contributing to deficit reduction, but also, over time, of decreasing America’s dependence on foreign oil, an objective whose importance has become increasingly evident in the face of the Iraqi invasion of Kuwait.”

Traditionally, Congress set the annual budget during extended, open committee hearings. But, with a Republican President and Democrat-controlled Congress, bipartisan haggling has made that increasingly difficult. And this year, despite the Gramm-Rudman balanced-budget law, which mandates more than $115 billion in automatic spending cuts beginning Oct. 19 unless Congress passes a budget, nine months of feuding left the budget talks in deadlock. That was broken only after five congressional leaders and three White House representatives locked themselves away for secret negotiations on Sept. 18. They emerged with the budget pact on Sept. 30, but then faced the difficult task of gaining support from rank-and-file lawmakers—a task complicated by Bush’s vow in the 1988 presidential campaign of “Read my lips, no new taxes.” The strongest opposition to the budget deal came from conservative Republicans, who argued that higher taxes would act as a drain on an already faltering economy, pushing the country into recession. On the other side of the House, many liberal Democrats opposed the pact because they said that the deficit-cutting measures would hit middle-income Americans the hardest. With a soaring national deficit and an impending government shutdown, lawmakers clearly faced no easy choices.

MARY NEMETH

with

WILLIAM LOWTHER

in

Washington