The White House Bulletin

September 4, 2001

SECTION: IN THIS WEEK'S WEEKLIES

Debate On Tapping Of Social Security Surplus Seen As Inevitable.

Newsweek (9/10, Fineman) reports, "President George W. Bush and Democrats in Congress start what is likely to be a nasty, months-long debate over how to fashion a budget without using Social Security tax money. . From the days of Lyndon Johnson until midway through the Clinton years, presidents and Congress spent Social Security 'trust fund' money at will, replacing it with I.O.U.s on the federal books. But in 1996 Bill Clinton took a Republican idea -- stashing mounting piles of Social Security tax receipts in a 'lockbox' account -- and ran on it." Newsweek adds, "Now everyone in Washington is locked in a 'lockbox' lockbox -- at a time when, many economists think, a sputtering global economy could use a jolt of extra federal spending." Newsweek continues, "The Democratic Party, NEWSWEEK learned, conducted polls and focus groups in August to prepare for a new ad campaign this week. The finding: voters would rather leave the surpluses untouched than dip into them for anything else -- missile defense, education and prescription drugs included."

Newsweek adds, "If forced -- as he almost certainly will be -- the president will argue it's worth dipping into the funds to avoid a recession and to bolster national security. . Bush will have to try -- and his generation will have to decide whether to accept." Bush Urged To Use Veto Threat To Keep Size Of Government Down.

Michael Barone writes in US News and World Report (9/10) "Much more than this year's budget is at stake. At issue is the size of government. The purpose of Bush's tax cut is to hold down government's share of the gross domestic product at around 18 percent. Democrats would like it up around 20 to 23 percent, where it was from 1975 to 1997." Barone notes, "Bill Clinton increased domestic discretionary spending by an average of 8 percent. Bush wants to hold that down to 4 percent." Barone advises, "Bush can use the veto to change the politics of spending once again. The way is simple: keep his word and veto any spending increase over 4 percent except for education and defense. ... Bush can do what Clintondid with great success -- threaten to veto bills if they don't meet his specifications."