|  Home  |  Site Search  |  Tax News & Views |
	Ballet du Budget Clint's Window by Clint Stretch, Director, Tax Legislative Affairs, Deloitte & Touche LLP Monday, June 3, 1996

Here We Go Again.

The Republicans announced with great fanfare in early May they have a new plan for balancing the budget in six years. I must caution you, though, this is just the beginning of this summer’s pas de deux of budget negotiations.

Even if the Republicans can agree amongst themselves on a budget -- a big if --there are no guarantees the Democrats in Congress, or President Clinton, will agree. Both Republican and Democratic leaders have said they agree on many fundamental budget issues, and tried to prod the other side to come to some sort of a deal. The devil is in the details, we know, and these pesky details have proven troublesome in the past. Both sides still are far from agreeing on the size of spending or tax cuts.

Remember too that there are many distractions during the summer season and Congress is not in session much of the time. Summer, particularly in an election year, is filled with parades, picnics, political conventions, luncheons, civic group meetings, and countless other campaign events that politicians up for reelection want to attend.

Congress typically takes several extended breaks during the summer; they prefer calling them district work periods. This year, the scheduled recesses run from June 29 to July 7 and from Aug.3 to Sept. 3. Also, expect many running for re-election to be preoccupied with events associated with the following summer holidays, as well as the political conventions:

• Mother’s Day, May 12.
• Memorial Day, May 27.
• Flag Day, June 14.
• Father’s Day, June 16.
• Independence Day, July 4.
• Summer Olympics, July 19-Aug. 4.
• Republican Convention, Aug. 12-15.
• Democratic Convention, Aug. 26-29.
• Labor Day, Sept. 2.

With all these distractions coming up, Congress won’t have a lot of time to work out a budget deal.

Frankly, with the conventions coming up, the Republicans and Democrats probably will not settle on a budget any time soon, for fear of giving the other party ammunition in the election.

The Republicans certainly don’t want to give Clinton the chance to take credit for a budget deal. However, if presumed Republican Presidential nominee Bob Dole’s poll numbers do not improve much by Labor Day, he might decide that a budget deal could help his campaign. Now that he has resigned from the Senate, though, he may not have much luck persuading House Majority Leader Newt Gingrich, R-Ga., or whoever ends up running the Senate (it could be Sen. Trent Lott, R-Miss., a much more conservative Republican than Dole), to make a deal with the "liberal" President Clinton.

The Democrats don’t want to give the Republicans the chance to claim that, once the GOP seized power in Washington, they succeeded in fundamentally reforming huge programs, such as Medicare or welfare, or that they cleaned up the deficit and balanced the budget, things the Democrats couldn’t accomplish in decades. (To be fair, these issues weren’t Democratic goals, but who is scrupulous about pointing out such things in a campaign?)

I doubt we will see any budget deals before Labor Day, and, considering that Congress hopes to adjourn by October 4 to campaign, I’m not sure that any deals will be struck before November’s elections.