Democrats Continue ‘Attacks’ Linking Tax Cut to Medicare

In the ongoing debate over the declining budget surplus, the New York Times reports that Democrats plan to "intensify their attacks" on President Bush's budget and tax policies this week -- with the White House and the Congressional Budget Office set to release reports that the budget surplus, excluding Social Security, "has all but evaporated for the next few years." According to Democrats, Bush's 10-year, $1.35 trillion tax cut has forced the government to tap the Medicare Part A and Social Security trust funds to cover operational costs. Democrats said they "were confident that the administration would pay a political price" for breaching an "informal" deal between Republicans and Democrats to avoid spending surplus Medicare Part A and Social Security funds (Stevenson, New York Times, 8/21). Amid the criticism, Bush plans to speak today in Independence, Mo., part of a "campaign-style blitz" through the Midwest (AP/New York Times, 8/21). Bush is expected "renew his vow" to protect the Medicare Part A and Social Security trust funds (Martinez, Detroit News, 8/21). Republicans accused Democrats of using "scare tactics" by linking Medicare and Social Security to the budget surplus.

On Wednesday, the White House plans to release updated budget projections (New York Times, 8/21). Estimates for the FY 2001 budget surplus will likely drop to about $160 billion, down from a projected $284 billion in April, the AP/New York Times reports (AP/New York Times, 8/21). The White House report will likely estimate that the government has "used up" most of the $30 billion Medicare surplus this year, but "barely avoided dipping into" the Social Security surplus. The CBO will release projections next week that will likely "vary somewhat" from the White House figures (New York Times, 8/21). Although agency officials declined to comment on the report, congressional analysts predicted the CBO report will likely estimate that the government will "come within a few billion dollars of, or even cross the line into," the Social Security surplus (McKinnon, Wall Street Journal, 8/21).