CLINTON: Budget Plan Hinges On Tobacco Settlement
President Clinton is expected to release his $1.73 trillion FY 1999 budget plan today, a proposal that relies heavily on congressional passage of the $368.5 billion global tobacco settlement to fund several new initiatives. The Washington Post reports that "[t]he budget plan ... will count on raising $65.5 billion in revenue over five years" from tobacco settlement funds, $30 billion of which would go to tobacco research programs and anti-smoking campaigns directed at teenagers (Chandler, 2/1). Today's New York Times calls the budget plan's reliance on the tobacco settlement "a grand gamble." The Clinton plan would use $900 million of the "tobacco funds" to support a five-year "effort to enroll more lower income children in Medicaid." Over the next five years, an additional $1.2 billion would go to the Food and Drug Administration, $25 billion would support National Institutes of Health research, $400 million would go to the Centers for Disease Control and Prevention to conduct anti-smoking campaigns; $800 million would support "trials of cancer therapies among Medicare patients"; and $22.3 billion would go to the states to use "as they see fit, as well as to anti-smoking programs and to tobacco farmers."
The New York Times reports that Clinton's "budget is silent" on how to raise the tobacco funds, leaving Congress to decide whether the money should be raised through "a cigarette tax or industry penalties or voluntary payments." Administration officials claim that the president's budget "is carefully constructed to set up political tradeoffs that Mr. Clinton can use to goad lawmakers into action." According to the Times, relying on the $65.5 billion in tobacco funds allows Clinton "to propose new spending while preserving the surplus," which will be used to preserve the solvency of the Social Security system. The Times, however, notes that the tobacco settlement faces a tough challenge in Congress, and some Republicans are not inclined to support using the settlement to fund other programs. Senate Majority Whip Don Nickles (R-OK), who is coordinating Senate Republicans' position on tobacco, said, "I'm not inclined to help [Clinton] fund a variety of social programs out of this deal" (Mitchell, 2/2).
The AP/Boston Globe reports that Republicans have already "attacked the ... budget President Clinton will send to Congress today as a 'magnificent contradiction' that violates the spirit of last year's balanced budget agreement" with tax increases and new programs (Crutsinger, 2/2). Appearing on "Fox News Sunday," Senate Budget Committee Chair Pete Domenici (R- NM) "called it highly 'speculative' for Clinton to count on the tobacco money given the opposition in Congress." Appearing with Domenici, White House Budget Director Franklin Raines defended Clinton's proposal, saying that the president "stayed within the spending caps set by the agreement" and that "the president's proposals are all paid for" (2/1). The New York Times reports that "Republicans, who receive far more in campaign contributions from the tobacco industry than do Democrats, are already angry over the choices that Mr. Clinton has given them." Senate Majority Leader Trent Lott (R-MS) said he had recently told the president, "[O]h yeah, you've got it set up great. If we don't do anything, you're going to attack us saying, 'Oh, well, you're just trying to look after your tobacco friends'" (2/2).
Near Elderly Debate
Appearing on yesterday's "Meet the Press," congressional leaders from both parties responded to moderator Tim Russert's suggestion that the expansion of Medicare to the near elderly would have to be subsidized by the government. Sen. Daniel Moynihan (D-NY) disagreed, saying he will "not put a bill in that won't pay for itself." He added, "You're not talking about a lot of people, 150,000 people. It's doable." House Majority Leader Dick Armey (R-TX) noted that Medicare had just been saved "from the jaws of insolvency for the past three years," implying that the president's near-elderly proposal would bring the program down again. "Let the Medicare commission look at it. But quite frankly, I think it also goes against the grain of extending the longevity of the American worker," he said (2/1).