European Stars and Stripes (Newspaper) - November 28, 1994, Darmstadt, Hesse                              The hard Deal ii l be dim to by Clay Chandler the Washington Post he House republicans contract with America embraces a tangle of contradictory economic policy goals that defy the conventional Wisdom about what is politically possible and challenges Congress to fundamentally restructure the role of government. The 10-Point program that republicans ran on and democrats ran against promises House votes on a constitutional amendment requiring a balanced budget by 2q02, a stronger military and multimillion Dollar tax cuts Over the next five years. Balancing the budget without touching either social Security or medicare. Which Republican leaders have vowed to protect while strengthening the military and cutting taxes would require deep and politically painful cuts in the remaining Federal programs Many budget analysts said. Republicans say that s just the Point House speaker to be Newt Gingrich a Ca has said that that sort of sweeping reduction in government along with a whole new approach to Federal budget accounting is what the republicans dramatic electoral Victory was All about. But Many analysts Liberal and conservative fear the More Likely consequence of the Republican economic strategy which offers More detail about proposed tax cuts than the spending reductions to offset them will be a return to the soaring deficits of the Reagan Era and a collapse of budget discipline. The Republican economic platform is a big evasion said Heitert Stein senior economist at the conservative american Enterprise Institute and the former chairman of president Nixon s Council of economic advisers. The balanced budget amendment Stein said is full of hypocrisy. I Don t see any Way you can balance the budget with All those things off the  republicans used to be the crowd you could count on for deficit reduction said Martha Phillips of the Concord coalition a bipartisan group advocating fiscal restraint. This does t look like deficit reduction to me Phillips is a former Republican staff director of the House budget. Committee. " investors too Are wary of Republican proposals. Wall Street while generally pleased with the Republican Victory is very nervous about the veracity of this contract said Donald Stra Beim chief economist at Merrill Lynch & co. The tax cuts Are Laid out but the spending cuts Are  the Crux of the republicans dilemma is this projected savings from the list of Sample spending cuts put Forward by cop contract supporters would total $176 billion Over five years based on current projections of spending and analysis inflation. That sum is just enough to offset the package of tax cuts and spending increases at the Core of the Republican Agenda. But just breaking even on tax and spending proposals would do nothing to reduce the deficit which is expected to swell by $743 billion Over five years if spending continues at current Levels according to congressional budget office estimates. If Republican proposals Are considered Over a seven year period the interval within which the Republican backed amendment would require the budget to be balanced the Revenue shortfall balloons to $1.2 trillion co estimates. Many republicans. Including incoming House budget committee chairman John r. Kasid Ohio argue that co s method of projecting future budget deficits exaggerates the political pain associated with balancing the budget because its calculations assume that government programs Are perpetual continuing without change and growing at a projected rate of inflation. Kasich contends the budget can be balanced by slowing the rate of growth in Federal spending rather than actually reducing current government expenditures the required cuts would not be As great As the estimates maintain because the deficit would not really be As great arguments Over accounting also underlie different estimates of the Impact of Republican tax proposals on government Revenue. Democrats for example charge that cutting taxes on capital gains profits from the Sale of Stock and property and changing accounting rules for the depreciation of equipment would add significantly to the deficit. Republicans contend these tax changes would actually generate new Revenue in the Long run by encouraging new investment and raising the Economy s productivity. At Issue is whether government scorekeepers consider ways that those lower taxes might stimulate economic growth. Republicans complain that the conventional models used by co and the congressional joint committee on taxation reflect a narrow Static View and argue for a More dynamic approach. Democrats respond that there is Little economic evidence supporting the republicans dynamic method. Office of management and budget director Alice m. Rivlin blasted it As nonsense and warned that it s a License to bust the  last week Republican budget experts began translating the cop contract s promises into detailed legislative proposals. The task will not be easy Republican staffers . Rep. Newt Gingrich r-ga., holds a copy of the go contract with America while explaining its goals during the Republican governors conference in Williamsburg,va., last week. Acknowledge. The document Republican House candidates signed on the Capitol Steps in late september was a Broad 10-Point summary of measures they promised to bring to a vote in the first 100 Days of the next Congress. The Republican staffs of the House and Senate budget committees who Are reviewing line by line More than 270 pages of draft legislation said there Are Many details that must be filled in. For example the list of spending cuts the Republican National committee issued with the contract included such items As $28 billion Over five years from general overhead  similarly the inc said the party s plan for welfare Reform would save $40 billion Over five years but offered no specifics and said strengthening the military would have no  asked whether the plan s budget estimates add up William a. Niskanen a Reagan economic adviser who is now chairman of the conservative Cato Institute scoffed of course they Don to the republicans he said Are nowhere near making the numbers come out budget experts in the Senate where Republican leaders have been reluctant to embrace the cop contract s bold Agenda said readying legislation in time for the opening of the next session will be a daunting Challenge. In addition scrutiny from Bond holders who Are certain to push interest rates up if they doubt republicans commitment to bringing Down the deficit will add pressure to produce a credible package. Wall Street investors while generally pleased with the Republican Victqr fare among those who Are Uncertain what effect planned tax cuts will have on the deficit. The terms of the gop contract by the associated press before the midterm congressional elections More than 300 Republican candidates signed. A sweeping contract with America. It promises among other things welfare Reform Tough crime fighting Laws higher defense spending a capital gains tax Cut and votes on constitutional amendments requiring a balanced budget and term limits. House republicans have pledged to pass the 10-Point plan during the first 100 Days of the new cop controlled Congress starting in january. Here is a verbatim text of the contract s introduction and the 10 Bills that form its foundation and Are to be introduced in the next Congress introduction on the first Day of the 104th Congress the new Republican majority will immediately pass the following major reforms aimed at restoring the Faith and Trust of the american people in their government first require All Laws that apply to the rest of the country also apply equally to the Congress second select a major Independent auditing firm to conduct a comprehensive audit of Congress for waste fraud or abuse third Cut the number of House committees and Cut committee staff by one third fourth limit the terms of All committee chairs fifth ban the casting of proxy votes in committee sixth require committee meetings to be open to the Public seventh require a three fifths majority vote to pass a tax increase eighth guarantee an honest accounting of our Federal budget by implementing Zero Baseline budgeting. Thereafter within the first 100 Days of the 104th Congress we shall bring to the House floor the following Bills each to be Given full and open debate each to be Given a Clear Ana fair vote and each to be immediately available this Day for Public inspection and scrutiny. 10 Bills to be introduced by gop majority 1. The fiscal responsibility act a balanced budget tax limitation amendment and a legislative line item veto to restore fiscal responsibility to an out of control Congress requiring them to live under the same budget constraints As families and businesses. 2. The taking Back our streets act an anti crime package including stronger truth in sentencing Good Faith exclusionary Rule exemptions effective death penalty provisions and cuts in social spending from this summer s crime Bill to fund prison construction and additional Law enforcement to keep people secure in their neighbourhoods and kids Safe in their schools. 3. The personal responsibility act discourage illegitimacy and teen pregnancy by prohibiting welfare to minor mothers and denying increased Ardc Aid to families with dependent children for additional children while on welfare Cut spending for welfare programs and enact a Tough two years and out provision with work requirements to promote individual responsibility. 4. The family reinforcement act child support enforcement tax incentives for adoption strengthening rights of parents in their children s education stronger child pornography Laws and an elderly dependent care tax credit to reinforce the Central role of families in american society. 5. The american dream restoration act a $500-per child tax credit begin repeal of the marriage tax penalty and creation of american dream savings accounts to provide Middle class tax Relief. 6. The National Security restoration act no . Troops under . Command and restoration of the essential parts of our National Security funding to strengthen our National defense and maintain our credibility around the world 7. The senior citizens fairness act raise the social Security earnings limit which currently forces seniors out of the work Force repeal the 1993 tax hikes on social Security benefits Ana provide tax incentives for private Long term care insurance to let older americans keep More of what they have earned Over the years. 8. The Job creation and wage enhancement act Small business incentives capital gains Cut and indexation Neutral Cost recovery risk assessment Cost Benefit analysis strengthening the regulatory flexibility act and unfunded mandate Reform to create jobs and raise worker wages. 9. The common sense Legal Reform act loser pays Laws reasonable limits on punitive damages and Reform of product liability Laws to Stem the endless tide of litigation. 10= the citizen legislature act a first Ever vote on term limits to replace career politicians with citizen legislators. T6 the stars and stripes monday nvmber28,1994 the stars and stripes 17