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"Look but don't touch" was, in effect, the watchword of some of the President's political advisers, such as George Stephanopoulos and outgoing congressional liaison Howard Paster. Programs like Social Security and Medicare have been portrayed for decades as something that American workers had earned; trimming benefits for the affluent would be viewed as breaking a solemn social contract. (In truth, a recent Social Security beneficiary gets back what he paid with interest by age 71; anything after that is free). The Clinton political team believes the most serious problem is not Social Security but the runaway costs of Medicare and Medicaid. As outside political adviser Paul Begala argues, "All those ivory-tower elitists who talk about entitlement reform and really mean entitlement cuts should roll up their sleeves and help us reform health care."
Complicating the equation is another promise that the President made in order to pass his budget plan: establishing a bipartisan commission on entitlement reform, led by Nebraska Democratic Senator Bob Kerrey and G.O.P. Senator John Danforth of Missouri. The tentative consensus within the White House leans toward dynamic inaction, waiting for the commission's report in May to test the political waters on paring entitlements. But that would still leave unresolved a ticklish problem: Where would the savings from entitlement reform go? Congress is awash with it's-the-deficit-stupid fervor, while the Administration covets new money to pay for the President's still moribund investment agenda. "If this is a strategy to free up a little more money for the White House to spend," Kerrey says, "I'm not interested in doing it."
Clinton, who hopes to complete his consultations with Cabinet members before Christmas for the 1995 budget, is so desperate for money that one half expects to see him drilling for oil on the South Lawn. Panetta, playing the role of Dr. No, has already told the Cabinet that their initial requests were $20 billion over the congressional budget ceiling. To the dismay of some liberals, Clinton has declared the $281 billion Pentagon budget off limits. Moreover, the latest rules of the fiscal game require that new spending must be matched by offsetting cuts in existing programs. Somehow Clinton must find $16 billion to pay for such cherished initiatives as an expansion of Head Start and job- training programs, new investments in high technology and aid to communities devastated by military base closings.
Not too long ago, means testing was a notion embraced mostly by small political journals and policy wonks swimming in think tanks. But respectability came as the bipartisan cut-the-deficit Concord Coalition and investment banker Pete Peterson pushed schemes that would trim federal subsidies in gradual steps for families earning above about $40,000 a year. The new mood is reflected by Deputy Treasury Secretary Roger Altman, who declared recently, "Means testing in selected areas is an idea whose time has come."