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CBO says budget breaks spending caps; dips into Social Security Trust Fund

Chris Black/CNN

December 2, 1999
Web posted at: 6:30 p.m. EST (2330 GMT)

WASHINGTON (CNN) -- The non-partisan Congressional Budget Office Thursday said the federal budget for the current fiscal year not only breaks spending caps but also spends $17 billion from the Social Security trust fund.

Just two weeks ago, congressional Republicans claimed they had struck an agreement with President Bill Clinton that met their goal of not using any Social Security money.

But the CBO now estimates the budget deal spent all of the $14 billion estimated on-budget surplus as well as $17 billion from the Social Security surplus. Most of the federal surplus comes from the Social Security Trust Fund which has been running a surplus for years.

The federal government has used that money for 30 years for regular government spending, but this year both Democrats and Republicans pledged to leave it alone.

The CBO memo to members of Congress did include a caveat, saying the strong economy could generate enough unanticipated revenue this year to offset the money from the Social Security fund.

The CBO analysis said the $390 billion budget bill signed by the president Monday used a number of temporary fixes that attempted to keep spending in balance with revenues, including designating a number of government programs, such as the decennial census, as "emergencies;" a two-day delay in a pay day for military personnel and some civilian government employees; and a loan of $3.8 billion from the Federal Reserve.

Barry Toiv, a deputy press secretary to the president, said the administration is confident that they offered offsets to pay for Clinton's spending priorities in the final budget bill.

As to whether the entire budget is out of balance, he said only time would tell and the CBO's estimates could be overwhelmed by continued economic growth.

Clinton had proposed dedicating the entire Social Security surplus to debt reduction, a proposal Congress declined to consider. Republicans, concerned about protecting themselves politically on the issue, then pledged to not use any of the Social Security money for regular government spending. But the CBO began warning they were dipping into the Social Security after the first appropriations bills were approved in the fall.

 


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