Democrats Put Price on `Contract' Opposition Mounts to Republican Moves, but GOP Is Confident

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WITH the 104th Congress now two weeks old, much of the rhetorical combat clanging across Capitol Hill is about the economic viability of the tax, spending, and budget-cutting bills that make up the fiscal portion of the GOP "Contract With America."

Democrats - and a few Republicans - are focusing fire on the worth of the proposed balanced-budget amendment and the social equity of welfare reform and other proposed reductions in government.

Democrats chafe at what they call the inequity of major elements in the Contract: tax cuts they claim target the rich; welfare reform they believe leaves the poor poorer; the slashing of federal outlays to states, which they warn will force governors to raise taxes during tough economic times; and a sweeping plan to eliminate government deficits that may hit their favored entitlement programs.

Across the aisle, Rep. John Kasich (R) of Ohio and Senator Pete Domenici (R) of New Mexico, the House and Senate budget committee chairmen and deficit hawks, are pressuring Contract "revolutionaries" to commit up front on how they'll balance the budget.

"We'll come up with specifics for the first five years," says Rep. Lamar Smith (R) of Texas, who serves on the House budget committee. He's undaunted by the task, having already detailed a five-year plan of $430 billion worth of "very, very specific cuts" last year.

His doubters include Florida Democrat Rep. Dan Gibbons, who echoed an often-heard cry from his fellow party members this week when he refused to support the GOP tax plans by "just taking an empty promise that we're going to get the spending cuts."

He pointed to the Treasury Department forecasts that the bill for Republican tax cuts will exceed $700 billion over the next 10 years. "I read a lot about Draconian spending cuts, but what we're not talking about net cuts," Mr. Smith says. "We're talking about decreasing the increases in spending from 5 percent a year to 3 percent a year" and zeroing out the deficit by the year 2002.

He tells Democratic naysayers that it's also possible to grant modest tax cuts and reach a balanced budget within seven years "without touching Social Security by reducing the increase in spending from five percent a year to just two percent a year."

While detractors spell out the benefits and costs of the GOP agenda, conservative commentary ranges from the sublime to the scorching.

Advocates say the contract - especially the balanced-budget amendment - champions government minimalism, and would boost the private sector. Joe Cobb, senior fellow with the Heritage Foundation and former chief economist with the Republican leadership committee, is sold on it.

"The balanced-budget amendment would constrain fiscal policy as a tampering tool and eliminate {reckless government spending} because budgets would truly be pay as you go."

Mr. Cobb welcomes the proposed lifting of Washington's mandates on states and the extension of lump-sum grants because it saves Uncle Sam money, and forces governors and municipalities to make prudent choices for the most essential programs.

And on the planned tax cuts - from middle-class cuts to a reduction in the capital-gains tax - he says: "If a tax cut will cause economic growth but lose revenue in the first five years, I still want that growth. …