Of course, there's still work to do before Dec. 15, the next shutdown date. Here's a primer on the budget issues to be resolved and what to think about them.
* Taxes: Despite the talk about tax cuts, Congress has agreed to collect 41 percent more revenues in 2002 than are collected this year. For President Clinton, that's not enough. He wants more taxes to fund more spending, so he wants to scale back GOP changes, especially in capital gains taxes.
Republicans propose to make the rate on capital gains 50 percent of the rate on ordinary income. A good compromise would be to make it 60 percent of that rate. That would bring the capital gains tax for the richest Americans down from 28 percent to 24 percent and for those making $100,000 to 17 percent.
Another worthwhile tweak would be to give the $500-per-child credit only to
families making less than $70,000, rather than $110,000.
* Medicare: The government now spends $4,800 on each Medicare recipient. The Republicans want to raise that to $6,700 by 2002. In the misleading language of federal budgets, an increase like this - at a rate of 6 percent a year instead of the projected 10 percent - is called a $270 billion "cut."
The President must know that Medicare growth has to be slowed to about twice the rate of inflation, but, hypocritically, he accuses Republicans of trying to destroy the entire system.
Unfortunately, having gotten a taste of the public's reaction to one of their Medicare changes (a tiny increase in monthly premiums), Republicans have little stomach for a big fight. That, too, will have to be for another day and another president. For the final budget, the Republicans should retain the principle of broader choice (including medical savings accounts) but agree to let government spending rise more than they currently desire (say, a $200 billion "cut" rather than $270 billion).
