Deficit Must Be Dealt With Seriously

The budget battle beginning now on Capitol Hill is the right fight, led by the right people.

It’s the right fight because few things are more important to the future of the country than ending the massive budget deficits.

Sen. Pete Domenici, R-N.M., and Rep. John Kasich, R-Ohio, are the right people to be leading it, because they have established their credentials by their past actions and because they represent the real stakeholders in this battle.

Domenici just had his 63rd birthday and has eight children and six grandchildren. He can look at life from the perspective of senior citizens, concerned about their own retirements but also worried about the debt being passed on to their heirs.

Kasich, who turned 43 on Saturday and is single, is right in the middle of the baby-boomer generation, the folks whose Medicare and Social Security benefits are certain to be endangered if deficits are not brought under control.

Both men have battled for fiscal discipline ever since they came to Congress.

Last week, the two men and the committees they lead unveiled plans that would take the budget deficit down, step by step, from just under $200 billion in the current year to zero in 2002.

The plans are imperfect, but perfection is not the right standard. The question is whether in broad terms they have set the right goal and struck the right balance. Specific policy decisions can and will be made later in the legislative process.

For the most part, they have met that test. Personally, I would like to see selective tax increases added to the mix to erase the most damaging spending cuts, but neither party is suggesting that.

Getting to zero is the right goal, not just for psychological reasons, but because it is only at that point that we actually stop adding to the national debt and feeding the monster of compound interest that now diverts more and more of each year’s tax revenue into totally unproductive interest payments. The failure to set that goal was the main drawback in the otherwise courageous budget President Clinton offered in his first year as president. As a result of that failure, Clinton’s own budget plans for this term will add more than $1 trillion of debt to the $3 trillion debt he inherited.

The boldest and most important decision that Domenici and Kasich have made is to bring the big health care entitlements into their proposed solution. Past efforts to reduce government spending have focused primarily on the discretionary budget, the amounts appropriated each year to pay for everything from military weapons to FBI manhunts and the nightly cleanups of trash left in national parks. Some savings can be made there, but that portion of the budget already has been squeezed pretty hard.

Discretionary spending now accounts for only 47 cents of every federal dollar. Three-fifths of that goes to the Pentagon. One can question if threefifths of the challenges we face are amenable to military solutions, but Domenici and Kasich basically accepted Clinton’s defense requests as a minimum estimate of what our national security and international responsibilities require.

Roughly 35 cents of every federal dollar go to retiree benefits, including Social Security and Medicare. Domenici and Kasich propose getting a slightly smaller share of their savings from that portion of the budget. That is not unreasonable.

There are pieces of the House and Senate plans that the Democrats can and should challenge. To take but one example, killing the Legal Services Corp., which counsels poor people on their rights and litigates for them, strikes me as a right-wing ideological thrust rather than an economy move. The GOP budgets are too easy on corporate welfare; Kasich wanted to do more but opposition from within the GOP forced him to backtrack to only $12 billion in seven years - a token gesture. The reductions in education and training funds need careful scrutiny; many of those represent vital investments in people’s future.

But the Democratic response has been disappointing. Clinton and Democratic congressional leaders are condemning the cuts, but not offering an alternative. They are using the Republican tax cut proposal - which is not even part of the Domenici package - as an excuse to assail the whole GOP budget, especially its Medicare savings. This may be good politics for 1996, but it is rotten leadership for the nation.

Even Republican leaders know that the Housepassed tax cut is certain to be scaled back. If it is excessive, Clinton can veto it. But in the meantime, he and his fellow-Democrats need to get serious about the deficit problem.

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