Lott: Clinton to Have $80 Billion Deficit

(19:07 03/02/97) WASHINGTON (Reuter) - President Clinton's budget will
show an $80 billion deficit in 2002, according to figures to be
released this week by the Congressional Budget Office, Senate
Republican Leader Trent Lott said Sunday.

The Republican also told CBS's ``Face the Nation'' program that Senate
Republicans would consider some changes to the balanced budget
amendment in order to gain the one Democratic vote needed to send it
to the states for ratification.

``We're going to find out this week ... that the president's budget is
even worse than we originally thought,'' Lott told CBS. ``That is
going to be probably a minimum of $80 billion out of balance by the
year 2002.''
  
Separately, in a letter to Clinton made available to news
organizations, Lott also said an independent analysis showed Clinton's
plan to balance the U.S. budget by 2002 contained tax increases,
rather than tax relief.

``According to the Joint Committee on Taxation, your budget represents
a $13 billion tax increase in 2001 and a $23 billion tax hike over 10
years, because your proposed tax increases are permanent while your
proposed tax cuts are only temporary,'' it added.

The letter concluded by calling on Clinton to resubmit his tax
proposal.

The White House disputed Lott's statements, arguing that its fiscal
1998 budget, which covers the year starting on Oct. 1 and was sent to
Congress last month, provides a net tax cut for working families
whatever economic assumptions are used.

Gene Sperling, chairman of the National Economic Council, said Lott
was assuming that the Clinton plan's tax cuts would disappear in the
year 2001 whereas under the administration's economic assumptions,
they would continue indefinitely.

``We have a net tax cut for working families of over $90 billion that
based on our conservative assumptions will go on indefinitely,''
Sperling said. ``Our assumptions have proven to be too conservative,
not too optimistic, four years in a row.''

Under the administration's economic assumptions, Clinton's fiscal year
1998 budget would bring the federal government's accounts to a surplus
of $17 billion in 2002.

Clinton has proposed $98 billion in tax cuts over five years offset by
$76 billion in revenue increases, including the restoration of an
expired airline excise tax and a variety of efforts to close corporate
tax loopholes.

On changing the balanced budget amendment, which last week seemed sure
to face defeat in the Senate after a key senator said he would vote
against it, Lott told CBS: ``We're looking at some change that we
could make that would not lose us votes on one side and gain one or
two Democratic votes.''

``We are considering making a change, perhaps in the numbers that it
would take to get out of the blanced budget in a recession or a
national emergency, for national security,'' he said.

The chief sponsor of the amendment, Sen. Orrin Hatch, a Utah
Republican, said last week he expected the result in next Tuesday's
vote would be a 66-34 defeat. An amendment to the U.S. Constitution
requires a two-thirds majority, or 67 Senate votes, to pass.

One of the swing votes was that of Democratic Sen. Robert Torricelli
of New Jersey, who announced his intentions last Wednesday to vote
against the amendment.

The amendment would require a balanced budget starting in 2002 or
within two years of its enactment but does not specify how Congress
should do this. It would permit deficits and borrowing if approved by
three-fifths of Congress.

Within seven years of clearing Congress, the amendment must be
ratified by 38 of 50 states in order to become part of the
Constitution.