POLITICS : GOP’s 10-Point Plan

The Republican agenda in the next Congress, laid out by more than 300 House candidates in their pre-election “Contract with America,” promises sweeping tax and social reforms in the first 100 days of the new legislative session starting in January. But not all Republicans support all the provisions in the 10-point contract, which Democrats have attacked as an “extremist” attempt to take this country back to the supply-side economics of the Reagan era. Here is a point-by-point look at the contract, along with some perspective on the legislative prospects:

1) Balanced budget: A constitutional amendment to require the federal budget to be balanced by 2002 or within seven years of enactment, whichever comes later. The amendment also would require a three-fifths vote in the House and Senate to approve any future tax increases and allow the balanced-budget requirement to be waived in times of war or by three-fifths vote by both houses of Congress. Under the Fiscal Responsibility Act, the President would also receive the line-item veto--the authority to veto individual items in a spending bill without rejecting the whole measure.

Outlook: Likely to pass. Attempts to pass a balanced-budget amendment failed narrowly in the last Congress, and the large influx of new Republicans is likely to tip the balance in favor of passage by the required two-thirds majority. President Clinton has opposed it, but his veto authority does not extend to constitutional amendments. However, it would still have to be ratified by three-fourths of the states.

2) Crime control: Republicans opposed much of the social spending and gun control provisions in the Democratic crime bill that passed by narrow margins earlier this year. Starting in January, they plan to amend it with the so-called Taking Back Our Streets Act, an anti-crime package that would add new mandatory minimum sentences, toughen the death penalty provisions and put more money into prison construction by stripping funds for crime prevention programs, like midnight basketball leagues.

Outlook: Democrats will oppose many of the provisions but may not have the votes to block them because of the public outcry over crime. Clinton could veto any extensive rewrite of his crime bill, but congressional sources say it is unclear if the White House will pick this issue on which to confront the new Republican majority.

3) Welfare reform: The GOP’s Personal Responsibility Act would ban welfare benefits to unwed mothers younger than 18 as a means of discouraging out-of-wedlock births and teen-age pregnancy. It would also cut off assistance after two years to families covered under the main federal-state welfare program, Aid to Families With Dependent Children, and require welfare recipients to report the identity of a child’s father before receiving benefits. The growth of other programs would be capped.

Outlook: Cloudy at best. While some type of welfare reform seems inevitable next year, Republican moderates in the House and Senate may join Democrats in opposing some of the GOP proposals as too Draconian. Several committees will weigh into the debate and, in the end, look for something between the GOP bill and Clinton’s proposal to require young mothers to work after two years of receiving AFDC.

4) Education and children: A hodgepodge of “family values” provisions, the Family Reinforcement Act would establish school voucher programs, set up a nationwide tracking system to find parents who fail to make child support payments, strengthen child pornography laws and provide a tax credit for people who care for elderly relatives.

Outlook: Most of the provisions are likely to pass, but school vouchers to give parents the choice of sending their children to public or private schools may run into obstacles from some Republicans as well as Democrats.

5) Middle-class tax cut: The Republican version would establish a $500-per-child tax credit for families earning under $200,000 per year, create another tax credit to offset the so-called marriage penalty and allow individuals to open IRA accounts bearing tax-free interest upon withdrawal.

Outlook: Some form of middle-class tax cut is clearly in the offing, but specific contract proposals are expected to come under scrutiny by budget deficit hawks in the Senate.

6) National security: The proposal calls for increased defense spending and legislation to prohibit U.S. troops from serving under United Nations or other foreign command.

Outlook: Rough sledding. The prohibition on the foreign command of U.S. troops enjoys widespread support, but Republicans on the Armed Services committees are expected to object, agreeing with the Administration that it infringes on the President’s powers as commander in chief. Deficit hawks also note that the contract does not say how Republicans would pay for higher defense spending without ballooning the deficit.

7) Senior citizens: Several tax cuts are proposed for senior citizens, along with raising the Social Security earnings limit and helping the elderly pay for long-term care by allowing them to make tax-free withdrawals from IRAs or 401(k) accounts to pay for long-term care insurance.

Outlook: Some kind of tax relief for seniors appears likely but, again, the specific proposals are likely to run into opposition from Democrats and some Senate Republicans because of their weight on the budget burden.

8) Capital gains tax cut: The GOP proposes to halve the capital gains tax and adjust the purchase price of an asset for inflation, thus reducing the taxable capital gain at the time of sale.

Outlook: Unclear. Republicans in both the House and Senate support a capital gains tax cut, but Democrats deride the proposal, which could raise the deficit by $56 billion over five years, as a break for the wealthy. The White House strongly opposes it, and small business groups are also skeptical.

9) Legal reform: Tort reform to set limits on punitive damages in product liability and medical malpractice lawsuits is proposed, as well as a “loser pays” provision to allow judges to order the losers in lawsuits to pay the other side’s legal costs.

Outlook: Dicey. Efforts to discourage runaway litigation and protect the health industry in particular from exorbitant costs are popular, but these specific provisions will have the nation’s trial lawyers and consumer groups lined up against them. Democrats also argue that the “loser pays” proposal would discourage all but the very wealthy from going to court. If it passes, a Clinton veto is likely.

10) Congressional term limits: A constitutional amendment to limit federal lawmakers’ terms of office to 12 years, or two terms, in the Senate and six to 12 years in the House, depending on which version is adopted.

Outlook: Don’t hold your breath. Term limits are extremely popular with voters, making them difficult to vote against, even though most lawmakers loathe them. But passage is still considered uncertain in the House and doubtful in the Senate, especially in view of the two-thirds majority requirement for amendments.