Promising a down payment on his middle-income tax cut proposal, President Clinton Monday unveiled plans to restructure five federal agencies and save $24 billion over five years. "We have to change yesterday's government," Clinton declared.
The tax cut, aimed primarily at families earning less than $75,000, would cost $60 billion.Clinton says he can cut $76 billion from the federal budget in five years to pay for the tax cut. That would leave $16 billion for deficit reduction. But $52 billion of the cuts are unspecified and would not take effect until 1999 and 2000.
That leaves the $24 billion in cuts that Clinton outlined Monday.
The White House Monday released a broad outline of his budget-cutting plans. They include:
- Create a consolidated infrastructure grant of more than $11 billion a year and allocate the money to states and local governments for roads, bridges and other transportation needs.
- Make the Federal Aviation Administration's air traffic control system a quasi-private corporation. Safety features would remain under federal jurisdiction.
- Consolidate some 60 Housing and Urban Development programs into four and give housing vouchers for families and individuals to use for housing of their choice.
- Make the Federal Housing Administration, a Depression-era body that guarantees mortgages, a quasi-independent entity.
In addition, administration officials said Clinton was considering a litany of specific cuts that would slash money spent on roads, nuclear cleanup, public housing, electricity for the poor and a host of other programs.
"We must pay for the Middle Class Bill of Rights with new reductions in government spending dollar for dollar," Clinton said, using his name for the tax-cut plan.
He said his administration has already reduced the deficit by $700 billion, eliminated 100 programs and cut 300 others.
Promising to keep politics out of the debate, which has Republicans and Democrats fighting to see who can cut more taxes and government, Clinton said, "We have not let rhetoric and recklessness dominate."
Clinton also gave Vice President Al Gore 90 days to come up with more cuts in his "reinventing government" program.
The White House hopes the magnitude of the reductions will convince skeptical lawmakers and constituents that Clinton is serious about carving the fat out of government.
Clinton's primary targets in this round are the departments of Energy, Transportation and Housingand Urban Development - along with the Office of Personnel Management and the General Services Administration.
The White House said most of the money would come from the Energy Department, which would lose $10.6 billion over five years. In a sign of how far Clinton is from nailing down his budget cuts, the White House said $4.5 billion in cuts will come from "other" programs.
Administration officials, speaking on condition of anonymity, said Clinton has a long list of ideas to eliminate, reduce or sell off government programs that go beyond Monday's announcement, including:
- Transportation would cut its staff roughly in half over five years, from 106,000 to 54,000, and would consolidate its 10 agencies into three. That would save about $6.7 billion over five years.
Potential Losers: Amtrak, whose federal subsidy would be trimmed by $500 million this year and potentially eliminated in five years. The air traffic control system would become a government-run corporation, taking 40,000 employees off the federal payroll. Federal outlays for infrastructure, like roads and bridges, would be reduced by about $5 billion over five years - with states given more flexibility for spending the money.
- Energy would trim $10.6 billion in its annual budget.
Potential Losers: The rest of the money would come from various programs, including those that help poor people winterize their homes.
- HUD would cut about $700 million from its nearly $30 billion budget, consolidating 60 programs into a handful of block grants to cities. Local governments could take over some of HUD's duties, such as maintaining housing projects or providing rent supplements to poor families.
Potential Losers: Mayors whose cities benefit from the HUD money fear the "mega-block grant" concept will lead to overall reductions of housing aid.