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Budget, Appropriations Bills Reach President's Desk

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WASHINGTON--The Congress ear ly last week gave final approval to a five-year, $492-billion deficit-reduc tion bill that President Bush has pledged to sign, thus ending six months of bargaining, bickering, and politically charged brinksmanship over efforts to start bringing the federal deficit under control.

Lawmakers greeted the bill's passage with relief after spending four furious weeks, often into early-morning hours, crafting the reconciliation bill and the 13 regular spending bills for the fiscal year that began last month.

Mr. Bush also was expected to sign HR 5257, the $182.2-billion la bor and social-service spending bill that includes $27.4 billion for Education Department programs.

The Congress cleared HR 5257 Oct. 26, after adopting an amendment by Senator Jeff Bingaman, Democrat of New Mexico, to provide $1 million for the School-Year Exn Study Commission and $2 million for a National Council on Educational Goals or its equivalent, if authorized.

House members agreed to the amendment only after Mr. Bingaman removed language that left unwhether the council would need separate Congressional authorization. Representative Silvio O. Conte, Republican of Massachusetts, told his colleagues on the floor that the council should be authorized specifically by the Congress.

Two other amendments were approved by the Senate but then dropped from the final version of the bill. Senator Robert Dole, Republi can of Kansas, introduced an amendment, which passed 95 to 1, to amend the Job Training Partnership Act. An amendment offered by Senator Tom Harkin, Democrat of Iowa, would have provided $10 million for grants to states to begin implementing President Bush's Health Objectives 2000 plan.

HR 5257 allotted Education De partment programs an increase of $2.7 billion, or 11 percent, over last year's spending amount. The size of the increase stands in marked contrast to education appropriations in recent years, which frequently have received increases equal to little more than the rate of inflation.

The increase for education would have been $487 million larger, if House and Senate conferees had not ordered a 2.41 percent across-the-board cut for all discretionary programs in the bill in order to comply with limits set by the Congressional budget resolution for fiscal 1991.

The deficit-reduction bill, whose final provisions were hammered out during long hours of bargaining following House rejection of an earlier budget compromise reached between the White House and the Congressional leadership, also became the vehicle for a $22-billion, five-year package of child-care grants and tax credits that had been bogged down for months in Congressional conference committees. (See Education Week, Oct. 24 and 31, 1990.)

The centerpiece of the measure, which is the first federal child-care bill to be enacted since World War II, is a new state "child care and development block grant" to help subsidize child care for poor families and bolster program quality, at a cost of $2.5 bil lion in the first three years.

The package also provides for an expanded earned-income tax credit for poor working families, a supplemental credit for newborn infants, and a new credit to help offset health-insurance costs, which combined will be worth an estimated $18 billion over five years. And it authorizes $1.5 billion over five years to help states subsidize child care for families at risk of welfare dependency.

The deficit-reduction measure is expected to trim $40.1 billion from the fiscal 1991 projected deficit of $294 billion.

Over five years, the measure will raise an estimated $164.1 billion in taxes and cut military and domestic spending by $266.7 billion, including $1.8 billion from the Stafford Student Loan program.

The bill also provides for significant changes in the annual budget process, by establishing caps on separate military, international, and domestic spending accounts for three years. The caps will prevent the Congress from transferring un used military dollars to domestic programs, for example.

After three years, however, all three spending categories will have one overarching cap, and such transfers will be permitted.

In another change in budget procedures, the Interior Department appropriations bill approved by the Congress last month includes $210 million to "forward fund" several In dian-education programs next year. That would bring those programs in line with most Education DepartLrograms, for which funds also are appropriated a year in advance.

Several of the tax provisions included in the reconciliation bill would affect school districts.

The bill increases the amount of earnings subject to the 1.45 percent Medicare tax from $51,300 to $125,000, and extends the Social Security payroll tax to all state and local government employees not covered by a government-sponsored pension plan.

It raises the fuel excise tax by 5 cents, to 14 cents a gallon starting Dec. 1.

In a change aimed at making the wealthy bear more of the burden of reducing the deficit, the bill limits itemized deductions by 3 percent of adjusted gross income over $100,000, and phases out exemptions for single taxpayers earning between $100,000 and $225,000 and joint taxpayers earning between $150,000 and $275,000.

The report that accompanied the final version of the bill spelled out an agreement between House Democratic leaders and the Congressional Black Caucus, in which the leadership pledged to seek funding increases over the next three years for education, nutrition, and housing programs.

The non-binding agreement specified construction at historically black colleges and support for guaranteed student loans. House Education and Labor Committee aides said last week they were unsure what other education programs might have been part of the pledge, which helped win votes for the overall package.

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