Social Security Funds Tapped To Pay for Kosovo

Social Security Funds Tapped To Pay for Kosovo

Bipartisan support to spend surplus despite earlier promises

Carolyn Lochhead, Chronicle Washington Bureau
Thursday, May 6, 1999

President Clinton has repeatedly and popularly promised to ``save every penny'' of the federal budget surplus for Social Security until the program is rescued from its impending bankruptcy.

The Republican-led Congress has wholeheartedly concurred, recently passing legislation to stow away 100 percent of surplus Social Security money in a ``safety-deposit box,'' never to be touched again.

That was last month. Along came Kosovo, and out went Social Security. A huge ``emergency supplemental appropriations bill'' is headed for probable House passage today, and the only question between both parties is how many billions of the surplus -- every penny of it Social Security money -- will be spent.

The money will go not only to the Yugoslav war, but also to shower aid on farmers and steel companies, raise military pay and aid Central American nations hit by hurricanes last year, among other things.

FAST REVERSAL

Although the use of Social Security mon ey for other government programs is nothing new, both Clinton and Congress are tapping into the money just weeks after declaring it sacrosanct.

Last month, President Clinton asked for $6 billion in ``emergency'' funding to pay for the air war against Yugoslavia and the relief programs for the hundreds of thousands of refugees who subsequently fled the Kosovo province.

The House Appropriations Committee more than doubled Clinton's request, to $12.9 billion, packing in such extras as a $1.8 billion military pay and retirement package; $1.34 billion for spare parts; and $1 billion for base construction in Germany, Greece, Italy, Portugal, Turkey, Britain and Southwest Asia.

Neither the administration nor the committee offered offsetting cuts. That means all the new spending will come from Social Security, which is generating the entire $107 billion federal surplus this year. The rest of the government is expected to run a $20 billion deficit.

Redlands Republican Jerry Lewis, who chairs the defense panel of the House Appropriations Committee, said he is proud of the bill. Clinton's request ``in no way, shape or form addressed questions of what do we do to replenish missiles now in shorter supply, and how do we make sure America is ready on another front'' in Iraq or North Korea, Lewis said.

``Clearly, we're having some difficulty in readiness even in this relatively small country in a relatively small region of the world.''

MILITARY ASSESSMENT

Lewis said he asked the Pentagon to assess its ``absolute essential military needs'' if the air campaign were to continue through the fall. (Clinton has suggested it could last for several more months.) The result, he said, is an ``absolutely clean'' bill with no pet projects for House members.

Emergency spending bills are immune to the spending caps that Clinton and Congress settled on in the 1997 Balanced Budget Agreement. They require no offsetting cuts. Such ``emergency'' bills have become a routine and increasingly popular budget loophole.

Contra Costa Democrat Ellen Tauscher said that she supports the Clinton request, but acknowledged that the bill has become a ``Christmas tree'' for other military projects, most of which she supports.

``It's not a question of whether they're right or good or necessary,'' Tauscher said. ``But technically, this is for emergencies, and we're loading on a bunch of things that are generally accepted to be important and using this escape hatch'' to bypass the budget.

But she defended emergency spending from Social Security for Kosovo, as well as for farmers.

``The truth of the matter is that we have a surplus. It's very similar to if you were busily saving to build a garden patio, and all of a sudden you have a roof leak,'' Tauscher said. ``I know the administration is committed to preserving Social Security, and certainly I am, but at the same time, we have to pay for this operation and we have the money to do it.''

SCALED-BACK PACKAGE

The Senate is expected to scale back the House version to about $9 billion, about midway between the administration and House packages.

Although a handful of Republicans want to demand offsetting spending cuts, they are finding scant support.

``The biggest faction is those who want to fund the emergency bill and pay for it by raiding Social Security,'' said Steve Moore, chief budget analyst for the libertarian Cato Institute. ``Less than six weeks ago, they passed a budget resolution vowing never to touch the Social Security surplus again, and here they are doing it at the first opportunity they get.''

The Senate plans to tack their own Kosovo package onto an earlier emergency spending bill for farmers, aid to Jordan and hurricane-ravaged Central America. The Senate version would also quadruple farm aid to nearly $600 million, largely because of the work of Tom Daschle, the Democratic minority leader from South Dakota's wheat belt. Others tacked on aid for the steel, oil and mining industries who contend they are beset by cheap foreign competition or the collapse in commodity prices.