> Am I right in understanding this is an attempt to challenge Clinton to
> allow the management of this fund to pass completely out of government
> hands (something that Greenspan said was important). That Lott wants to
> pressurise him into conceding this, unbalance the budget, and increase
> gross military expenditure, at the expense of social security?
My reading is that the two parties do not disagree in principle in devoting the entire Social Security surpluses to debt pay-down. Presently that would leave the remainder of the budget with small deficits, but these are projected to end in 2002. From then on there are growing "on-budget" surpluses as well. The long-range projections foresee overall budget surpluses for 50 years. The important thing about the projections is not that they reveal the future accurately, but that they supply the parameters for decisions in the present.
The Repubs want to use the on-budget surpluses for military and tax cuts. How much of each is in question. They are totally gun-shy of being connected to any 'raid' on Social Security surpluses for defense or anything else. Clinton has completely outmaneuvered them on this issue. Until this past month, the GOP exhibited little interest in topping Clinton on defense spending "increases" (actually smaller decreases after factoring in inflation).
A small fly in the ointment is that the Balkans require somewhat more military spending now, not in 2002 or 2003, and this is likely to come out of the Social Security trust fund surplus. I don't think either party wants this, but they don't have much choice. Finding spending cut offsets is very difficult because the fixed dollar caps on spending are aggravating Republicans who thrive on highway spending, the space program, R&D, water projects, etc. Nor is it necessary because the budget rules allow for emergency spending, and merits of the war aside, the Balkans qualifies as an emergency.
The chief Republican interests now are finding money for tax cuts and non-Balkans military spending. Their problem is that, according to their mythology about the untouchability of Social Security surpluses, there is no money. Basically they have nowhere to go. Their budget initiatives are screwed. It will be all they can to do prevent their own ranks from breaking up and acceding to Clinton's proposal for moderate increases in the dollar caps on discretionary (non-entitlement) spending.
Clinton's job is much simpler. All he cares about is debt pay-down. He has the unique ability to use any sort of surplus to a limited extent for military or whatever, as his budget does, because he has nailed the GOP on the cross (of their own making) of debt superstition. He has credibility on this and sufficient profile to successfully define the GOP's budget proposals, rather than have his defined by them. All he has to do is sit back and wait for the GOP to come crawling with a peace offering (he should be so lucky in the Balkans) that satisfies their itch for limited spending increases. He doesn't have to give them a damn thing on tax cuts. At the end of the day, most of the surplus will be preserved, and next (election) year nothing at all will happen (hence more surplus and debt paydown). Then Prince Albert picks up the torch, is their presumption.
More likely, on this last, is that Bradley upsets Gore and gets the Dem nomination. Then Bradley nominates Brad to Secy of the Treasury, the GOP prints the LBO-PEN-L archives, and Brad goes back to smashing acorns in California.
Gore will lose to Bradley because two things look worse for him every day: the Administration's Balkans policy, and his comb-over.