Republicans step up drive for U.S. debt reduction

By Donna Smith/Reuters

WASHINGTON (Reuters) - After setting aside their tax cut agenda for the year, congressional Republicans Thursday stepped up their drive to use most of next year's budget surplus for debt reduction -- a proposal Democrats said was election-year politics.

Republican leaders staged an outdoor event on Capitol Hill with local grade school children to make their case for using 90 percent of next year's budget surplus to help reduce the $3.3 trillion in U.S. debt held by private investors.

"Right now many folks in this country know that the government has a surplus. That means we have given the government more money in taxes than it really needs," House Speaker Dennis Hastert explained to the children.

"We thought it was only right to give that money back by getting rid of some the burdensome taxes that people have," the Illinois Republican added. "The president said that you can't have that money back.... Republicans said if you can't give that money back to people then let's give you some of that money back by paying off the national debt."

Republicans began urging President Clinton this week to set aside 90 percent of next year's surplus for debt reduction after the House failed to override Clinton vetoes of estate tax and marriage tax cut bills.

The House Ways and Means Committee on Thursday unanimously approved a bill that would set aside all of Social Security and Medicare surpluses for debt reduction as well as $42 billion of the rest of the budget surplus.

That would leave about $28 billion of next year's surplus projected by the Congressional Budget office for extra spending and tax cuts.

House Democratic Leader Richard Gephardt called the bill a "short-term half-measure" and accused congressional Republicans of playing election-year politics while abandoning their presidential nominee George Bush by switching from tax cuts to debt reduction.

"For two years the Republican Party in Congress has supported one thing: a massive, $2 trillion tax cut package that left no money for debt reduction, education or prescription medicine benefits," Gephardt said.

"Now, with their 90-10 debt reduction plan, Republicans have essentially repudiated their own agenda, which they have pursued vigorously for the last six years," the Missouri Democrat added.

Democratic presidential nominee Al Gore in his economic plan called for paying off the debt held by private investors by 2012 while boosting spending for health care, education, the environment, defense, Social Security and Medicare.

Rep. J.C. Watts of Oklahoma, the fourth ranking Republican in the House, told reporters that Gore's focus on debt reduction in recent days put the onus on congressional Republicans "to set the record straight."

He said Republicans wanted to remind voters of their push to curb spending and bring the budget into surplus.

"It's that time of year when we have to be a lot more focused in reminding the American people of what we have accomplished," he said.

Democrats said they would vote for the Ways and Means debt bill but questioned whether the plan would leave enough money to pay for Republicans' own budget bills now moving through Congress for fiscal 2001, which begins Oct. 1.

House Appropriations Committee Chairman Bill Young, a Florida Republican, said his panel was looking into how the plan would affect the 13 bills Congress must pass each year to fund the government. Only two of the measures have been signed into law by the president so far.

Asked if the plan leaves enough money to cover the bills, Young said, "I think so, but we're not sure."

To make the spending bills more attractive to Republican budget hawks who have complained they are too costly, top Republicans also are considering earmarking specific amounts for debt reduction on each bill.

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