The Magazine

House Republicans Are Winning One

The budget battle of 1999, hard to believe but true, has featured GOP cunning

Nov 8, 1999, Vol. 5, No. 08 • By TOD LINDBERG
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They decided to make Social Security their friend. For years, the fact that government took in more in Social Security taxes than it paid in benefits, $ 99 billion in 1998, was irrelevant to the big picture on the deficit. In other words, government "spent" the Social Security "surplus" -- that is, the deficit for running the rest of the government, apart from Social Security, would have been higher by the amount of the Social Security surplus. No one seriously objected to this "raid" on the "Social Security trust fund." These are arbitrary accounting distinctions.

Then, in a series of head-scratching staff meetings devoted to the question of how not to get killed, Republicans finally hit paydirt -- a line they could articulate simply and clearly, with potential for public resonance, and around which they could keep their slender majority united, against all odds. It was "Stop the Raid" on Social Security. At a stroke, they were able to declare some $ 147 billion of the federal budget surplus for 2000 off limits to new spending. And they were able to hold that line.

In accounting reality, this Social Security surplus figure is no less arbitrary than the budget caps supposedly still in force. But in the real world of politics, the fact is that budget caps were too abstract to hold Republicans together. Social Security is real. Clinton's rhetorical case against a tax cut hinged on protecting Social Security, for example.

Without necessarily setting out to do so, the GOP leadership essentially created a very useful artificial deficit, the size of the Social Security surplus. This "deficit" now serves as a restraint on federal spending -- and will continue to do so. The Social Security surplus is estimated at about $ 155 billion in fiscal 2001 and $ 164 billion the year after. If Republicans win this point, it's likely to work for them in future budget rounds.

The story of the fiscal 2000 budget, then, is not the story of gimmicks and gewgaws. That's the story of the budget every year. The story is how a perilously thin and nervous GOP majority under an untested leader managed to change the subject in such a way as to forestall scores of billions in additional government spending at a time when the government had the money. Dennis Hastert turns out to be the most underestimated politician in Washington since Bill Clinton in January 1995.

Tod Lindberg is editor of Policy Review.