The devil is in the details, the old adage goes, and it couldn't ring more true than it does when the topic is the federal budget.

The 1997 budget agreement, released last month, was highly touted by President Clinton and the Republican leadership in Congress.

They told us of their plan to balance the federal budget by 2002 and provide modest tax cuts for hardworking Americans.

But if you take a close look at what they're proposing, it becomes fairly obvious that the deal is based on $300 billion in questionable economic assumptions.

Remember Clinton's assertion that the era of big government is over? Well, it's not.

The economic assumptions in the budget deal mask a substantial INCREASE in the size and scope of the federal government.

The Heritage Foundation recently released an analysis of the 1997 budget deal. Scott A. Hodge, a Grover M. Hermann fellow in federal budgetary affairs, wrote the analysis.

He notes, "The real test of a balanced budget plan is whether it actually leads to smaller, less costly government and leaves more money in the pockets of working families. The available evidence shows that this budget deal fails on nearly every count and that, in most cases, the policies it reflects may be worse than doing nothing."

First, a look at spending.

• Discretionary spending will balloon by at least $96 billion above current levels over the next five years, starting with as much as $8 billion in new spending in fiscal year 1998.

jj While congressional leaders agreed to $30 billion in new White House initiatives, they received no commitment to eliminate any wasteful programs in exchange. That means no programs will be eliminated.

jj The deal also will erase all savings achieved in last year's landmark welfare reform legislation. The deal includes $22 billion in spending for new children's health care initiatives, welfare benefits for legal aliens and food stamp recipients, in addition to a $37 billion bailout of private owners of low-income housing.

jj The reported $115 billion in Medicare savings will stem the growth of these programs only modestly over the next five years while doing nothing to promote any fundamental restructuring. The Medicare deal includes a home health care accounting change that has been widely condemned as inviting a surge of new spending. And the price controls included in the plan could lead to worse care for Medicare recipients.

Next, a look at the tax-cut package.

jj The budget deal proposes a "net" tax cut of $85 billion (that's a $135 billion tax cut offset by $50 billion in new taxes). But that is just 1 percent of the $8.5 trillion in estimated tax receipts over the next five years. That $85 billion is supposed to include tax relief for families with children, capital gains tax relief, death tax reform and tax cuts for college tuition. In reality, $85 billion is only about a third of what is needed to cover all those tax cuts. The cost of the $500-per-child tax credit alone is $105 billion over the next five years.

jj The tax cut will probably be even smaller because the budget deal assumes that the Bureau of Labor Statistics will adjust the measurement of the Consumer Price Index downward by 0.25 percentage points. This adjustment will generate roughly $6 billion more in taxes over the next five years. So the "net" tax cut falls to $79 billion. That means that taxpayers will receive only 67 cents in tax relief for every NEW dollar of goverment spending.

jj The budget deal assesses some $50 billion in new taxes to offset some of the tax cuts offered. Around $34 billion is to be generated by extending the Airport and Airway Trust Fund tax, which expires at the end of this fiscal year. Other revenues will come from eliminating various tax deductions for businesses. Raising taxes is an easy way for lawmakers to avoid cuts in wasteful spending.

And, by the way, the tax cuts are phased in over many years and the spending begins immediately.

That's always the way it goes. And that's a raw deal for taxpayers.

Of course, the deficit reduction portions of the deal are always back-loaded. The Congressional Budget Office found that Clinton's fiscal 1998 budget pushed 98.5 percent of its deficit reduction measures into fiscal years 2001 and 2002 - after he leaves office.

So no matter what the president says and no matter what our congressional leaders tell us, this budget is much like the ones before it. Lots of warm and fuzzy talk about reduced deficits and lower taxes, but precious little meaningful reform. [[In-content Ad]]