Related topics

Gingrich: Analysts See Surplus

February 27, 1998

WASHINGTON (AP) _ Congress’ budget analysts believe there will be a $5 billion to $10 billion federal surplus this year and continued surpluses for the next few years, House Speaker Newt Gingrich said Friday.

Gingrich, R-Ga., cited new projections by the nonpartisan Congressional Budget Office, where officials acknowledged that new estimates they will release next Wednesday will show annual surpluses of single-digit billions of dollars. If the forecast proves true when fiscal 1998 ends Sept. 30, it would be the first federal surplus since there was $3 billion in black ink in 1969.

Although this was the first time government analysts have forecast a surplus for the year, there was nothing unexpected about the announcement. Many private economists have been predicting a 1998 surplus for months, crediting it mostly to a robust economy that has generated piles of federal revenue.

Even so, Gingrich claimed Republican credit for a landmark accomplishment due in part to GOP drives to revamp Medicare, Medicaid and welfare and to reduce capital gains tax rates. He also contrasted the projected surplus with estimates of a $229 billion 1998 deficit that were made three years ago, when Republicans first took control of Congress.

``I think this is a historic day for the country and a very, very great achievement,″ he said.

But at the same time, Gingrich sought to dampen the enthusiasm of lawmakers _ including many of his own party _ who want to use surplus funds to pay for tax cuts or more spending for highways and other projects.

``At a margin of $5 billion to $10 billion, you don’t want to make the argument that there is a lot of surplus to give away,″ he said.

Instead, Gingrich repeated his call for annual tax cuts paid for by trimming federal waste and other spending cuts.

``The tax relief decision is a question of, Do you want bigger government with higher taxes or a smaller government with lower taxes?″ he said.

Gingrich also gave some credit to President Clinton, who ``signed the bills″ that Congress has approved in recent years.

At the White House, spokesman Barry Toiv credited ``five years of fiscal discipline on the part of the president and the Congress.″

But he added, ``What we need to make sure of now is that Congress continues to heed the president’s call for continued fiscal discipline.″

Congressional Republicans have been divided so far this year over how to respond to Clinton’s proposed budget, and Gingrich has been among those trying to restrain his troops.

Clinton called for small tax cuts, about $140 billion in new spending, plus a pledge to use surpluses only to reduce the accumulated $5.4 trillion national debt _ which Clinton argues will buttress Social Security.

Some GOP lawmakers _ especially in the Senate _ want tax cuts similar in size to Clinton’s. They say it would be politically foolish for Republicans to push a bigger tax package paid for with surplus funds because Clinton’s identification of the surplus with Social Security has proven very popular.

But others, mostly in the House, want a much larger tax package and want to finance it at least partly with the surplus.

Gingrich and other House leaders have been meeting sporadically to plot a budget course. They don’t plan to unveil a package until at least late April _ when Treasury Department figures on revenue collections could make the size of the surplus even bigger than they seem today. That would make it easier for them to satisfy Republicans vying for money for tax cuts or highways.

Update hourly