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GOP Remains Optimistic About Reaching Budget Deal

Monday, January 13, 1997

OnLine

GOP congressional leaders expressed optimism Jan. 12 about reaching a balanced budget agreement in 1997, despite the partisan bickering over ethics charges about House Speaker Newt Gingrich, R-Ga.

Congress will not be distracted by the Gingrich issue, which will come to a head Jan. 21 when a vote will be taken on how to punish the speaker, the leaders said.

In another development, House Ways and Means member Rep. Jim McDermott, D-Wash., may have received the transcript of a private conversation among GOP leaders about how to handle the charges, according to press accounts. If McDermott received the improper transcripts, he should resign from Congress, one GOP leader said.

Optimism Prevails

Senate Majority Leader Trent Lott, R-Miss., reported on CBS’ Face The Nation having "good conversations" with President Clinton about reaching a balanced budget agreement. Some differences between the two sides remain over non-tax issues, such as the level of Medicare spending, he said.

Passing a balanced budget amendment to the Constitution will be a high priority for the Senate when it convenes Jan. 21, Lott said. The House last Congress passed a balanced budget amendment to the Constitution, but efforts to pass one in the Senate failed.

GOP senators have been meeting privately over the past week to work out their agenda in the 105th Congress, and Lott indicated they would unveil their plans soon after Inauguration Day.

Also speaking Jan. 12, House Majority Leader Dick Armey, R-Texas, said on ABC’s This Week With David Brinkley that he continues to hope that a balanced budget agreement can be reached.

"I think our first priorities are balancing the budget and cutting taxes, giving people the advantages of lower interest rates in their real lives," Armey said about the 105th Congress.

Armey also said allowing Social Security funds to be invested in the stock market, "has merit. It's going to take a lot of leadership on the part of the president if it's going to go forward." Americans must feel secure about any changes to the program, if the proposal is going to work, he added.

Last week, the Advisory Council on Social Security recommended allowing some Social Security funds to be invested in the stock market. Though the panel did not suggest a single solution for ensuring the solvency of the trust fund in the coming years, it did offer three options for allowing some social security funds to be invested in the stock market.

Adjusting the way the Consumer Price Index is calculated is another good idea, but will need strong leadership if it is to be enacted, Armey said.

"If in fact we can focus on a professional evaluation of the cost of living index and keep the politics out, that has -- that is a possibility if done on a professional basis," he said of the recommendations of the panel headed by former Council of Economic Adviser chair Michael Boskin.

The Boskin panel said the current formula used to calculate the CPI overstates the inflation rate by 1.1 percentage points annually, so the calculation should be adjusted, the panel’s report said.

Kies Warns Exempt Organizations: Tax-exempt organizations should be aware that Congress may take a close look at their operations, in light of the recent scandal involving Gingrich, Joint Committee on Taxation Chief of Staff Ken Kies said at the American Institute of Certified Public Accountants meeting in Scottsdale, Arizona.

Congressional concerns could result in oversight hearings by the tax-writing committees, Kies warned at the meeting. In particular, organizations should take steps to ensure that they do not violate laws restricting tax-exempt organizations’ political activities, Kies said.