Advantage Bush

President Clinton's announcement of a trillion-dollar budget surplus may well give a political boost to the man Mr. Clinton wants to see defeated in November: George W. Bush.

That's because Bush's campaign promises of large tax cuts and additional spending, which once looked to be overly optimistic in the light of previous estimates of the size of the surplus, now appear to be on target.

Based on advisers' assumptions of a total $4 trillion surplus, Bush proposed a $1.3 trillion tax cut and $1 trillion apiece for debt reduction and shoring up Social Security. The $700 billion balance would be used for priorities to be determined later.

Vice President Al Gore has criticized the Bush tax-cut plan for months, suggesting it was unaffordable and would imperil entitlement programs.

Gore had been working until recent weeks under the government's last set of projections, which estimated the total surplus at "only" $3 trillion , $746 billion of which was from general revenues and thus available for spending or debt reduction.

Mr. Clinton's surplus announcement was just what the doctor ordered for the Texas governor: another trillion dollars to balance his books.

"Using the old government projections, it appeared that Bush's proposals broke the bank," says former Congressional Budget Office director Robert Reischauer. "Now, without producing his own projections ... Bush can argue that he is in the ballpark. He is devoting the vast bulk of the surplus to tax reductions, but he's not being fiscally irresponsible. This takes away the argument that Gore was using against him that his proposals were 'risky.'"

According to the Office of Management and Budget's latest projection, Social Security will run a $2.3 billion surplus over the next ten years, Medicare $403 billion, and there will be another $1.47 billion of general revenue from taxes.

The Bush camp feels vindicated by the big new surplus estimates.

"If it does anything from a political standpoint," says Bush adviser Tucker Eskew, "it reaffirms Governor Bush's ability to do what he'd said he do."

Eskew says Bush "predicted this degree of surplus," and the revised projections are "basically in line with" the Texas governor's working assumptions of several months.

The latest windfall, of course, contains benefits for both candidates.

The extra cash gives both men more latitude to promise new spending tailored to targeted constituents and favorite causes, while keeping their commitments to the rival gods of tax cutting and debt reduction, which are the cornerstones, respectively, of Bush and Gore's economic plans.

Before Monday's revisions, the candidates outlined very different approaches to managing the surplus, based on different 10-year projections.

The total or "unified" federal surplus comprises a few different kinds of money: Social Security; Medicare; and general revenue from taxes.

It was all considereone big pot of money until last year when both parties got behind the idea of segregating Social Security funds into a so-called "lockbox" that insures that money raised from Social Security taxes goes first to pay Social Security's obligations, then to debt reduction. The Clinton Administration and the Gore campaign want to do the same for Medicare revenues, which are now still counted as part of the general surplus.

In anticipation of Monday's announcement, and a second set of projections expected in the next few weeks from the Congressional Budget Office, Gore has proposed a smaller, $500 billion tax cut and begun detailing his surplus spending plans for his policy priorities on education, health care and the environment.

The vice president has cast himself as an architect of the historic economic expansion and the natural choice to captain its continued growth.

In making the surplus announcement, Mr. Clinton cautioned that the big numbers are just projections, not cash in hand, and proposed the creation of a hands-off, $500 billion reserve fund of surplus dollars to be divvied up by the next administration and Congress. It would be "imprudent to decide now, before the elections, how to spend each penny" of the anticipated surplus, the president said.