Newspaper article THE JOURNAL RECORD

Budget Chief: GOP Cuts May Spur Recession

Newspaper article THE JOURNAL RECORD

Budget Chief: GOP Cuts May Spur Recession

Article excerpt

WASHINGTON (AP) _ Proposed Republican tax cuts could drive federal budget deficits skyward and shove the economy into a recession, President Clinton's budget chief asserted Tuesday.

Alice Rivlin, who heads the administration's Office of Management and Budget, said it would be irresponsible to cut taxes without paying for them with offsetting spending cuts _ especially with the economy already growing at a healthy rate.

"If we had a big tax cut right now and people were spending more, the inflation danger would be much more real than it is now," she said at a breakfast meeting with reporters. "You'd have rapid increases in interest rates, and probably throw the economy into a recession."

But exactly one week after voters gave Republicans control of the House and Senate for the first time in 40 years, Rivlin refused to say that Clinton would automatically veto a tax cut if Congress passed one.

"I can't speculate on that," she said. "The one thing I could say about the tax cut is we would insist it be paid for."

During his 1992 election campaign, Clinton promised a middle-class tax cut, but he abandoned the pledge after saying federal deficits looked worse than he thought. The administration has yet to flatly rule out, however, that it will propose a broad tax reduction in next year's budget.

During this year's campaign, hundreds of GOP congressional candidates pledged to support a "Contract With America" promising votes on a $500-per-child tax credits and lower levies for many seniors, investors, businesses and married couples.

Republicans fired right back at Rivlin. Rep. John Kasich, R-Ohio, who will be chairman of the House Budget Committee in January, said the GOP would pay for its tax cuts with spending reductions, not tax increases. And he criticized Rivlin for making a partisan attack.

"For the president's budget director to come out and use inflammatory rhetoric is not the way to do things around here," Kasich said. …

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