Fiscal 1999 Spending, Tax Bills In Limbo As Adjournment Nears

Nation's Business, Nov 1, 1998

It went right down to the wire-and beyond-when it came to forging federal spending and tax-cut plans for fiscal 1999, which began Oct. 1.

As lawmakers prepared to leave Washington to return home and campaign for the Nov. 3 elections, here is where things stood at press time:

* Congress had cleared fewer than half of the 13 regular appropriations bills for fiscal 1999, and President Clinton had signed only one of them. The rest, including spending for most health, education, and welfare programs, were expected to be bundled into one large measure.

* The Republican majority had given up on its five-year, $80 billion tax-cut bill. It had passed the House Sept. 26 on a 229-195 vote. But there was not enough support in the Senate to ensure passage, and the president had vowed to veto it. Further complicating the issue, Senate Democrats were prepared to offer an alternative $25 billion tax-cut plan.

The GOP tax-cut proposal would have eased the so-called marriage penalty, accelerated the phase-in of full deductibility of health-insurance premiums for the self-employed, and speeded up the phase-in of the $1 million estate-tax exclusion.

It also would have renewed a number of tax credits-typically known as "extenders"-important to business. They include credits for research and experimentation and for hiring welfare recipients and other disadvantaged people.

At press time, there were plans to separate the extenders, which have bipartisan support, from the tax-cut measure and move them through Congress as a separate bill just prior to adjournment.

* Republican congressional leaders and the White House both were taking credit for what was projected to be an approximately $70 billion surplus for the past fiscal year, the first federal budget surplus since 1969.